Witness Manufacturing produces two types of cameras: 35mm and digital.The cameras are produced using one continuous process.Four activities have been identified: machining, setups, receiving, and packing.Resource drivers have been used to assign costs to each activity.The overhead activities, their costs, and the other related data are as follows:
- Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm cameras.

Question

Witness Manufacturing produces two types of cameras: 35mm and digital.The cameras are produced using one continuous process.Four activities have been identified: machining, setups, receiving, and packing.Resource drivers have been used to assign costs to each activity.The overhead activities, their costs, and the other related data are as follows:  
-  Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm cameras.

Quizplus · Accepted Answer

Activity rate = Activity cost / Activity driver quantity
Activity rate for 35mm cameras = Activity cost of receiving orders for 35 mm cameras / Number of receiving orders = $10,000 / 1,500 orders (1,200 orders + 300 orders) = $6.67 per receiving order
Overhead assignment: Receiving costs for 35 mm cameras = (Activity rate × Number of receiving orders) = $6.67 × 300 orders = $2,001

Witness Manufacturing Produces Two Types of Cameras: 35mm and Digital