Tiny Corp. has provided the following information about its budgeted Manufacturing Overhead (MOH) costs. They also reported Direct Labor (DL) of $126,780 and Direct Materials (DM) of $78,699. They have broken the MOH costs into three activities:
What is Tiny's activity rate for each activity?
A) Utilities, $1.00/square foot; Maintenance, $1.80/maintenance hour; and Machining, $3.30/machine hour
B) Utilities, $1.00/square foot; Maintenance, $6.00/maintenance hour; and Machining, $9.00/machine hour
C) Utilities, $1.00/square foot; Maintenance, $8.74/maintenance hour; and Machining, $9.00/machine hour
D) Utilities, $6.10/square foot; Maintenance, $20.33/maintenance hour; and Machining, $16.64/machine hour

Question

Tiny Corp. has provided the following information about its budgeted Manufacturing Overhead (MOH) costs. They also reported Direct Labor (DL) of $126,780 and Direct Materials (DM) of $78,699. They have broken the MOH costs into three activities:
 What is Tiny's activity rate for each activity?
A) Utilities, $1.00/square foot; Maintenance, $1.80/maintenance hour; and Machining, $3.30/machine hour 
B) Utilities, $1.00/square foot; Maintenance, $6.00/maintenance hour; and Machining, $9.00/machine hour 
C) Utilities, $1.00/square foot; Maintenance, $8.74/maintenance hour; and Machining, $9.00/machine hour 
D) Utilities, $6.10/square foot; Maintenance, $20.33/maintenance hour; and Machining, $16.64/machine hour

Quizplus · Accepted Answer

This question requires that you calculate the activity rate for each of the key activities: Utilities, $30,000/30,000 square feet = $1.00 per square feet; Maintenance, $54,000/9,000 maintenance hours = $6.00 per maintenance hour; and Machining, $99,000/11,000 machine hours = $9.00 per machine hour (Choice B).

Tiny Corp Has Provided the Following Information About Its Budgeted Manufacturing