EyeGuard Equipment Inc. (EEI) manufactures protective eyewear for use in commercial and home applications. The product is also used by hunters, home woodworking hobbyists, and in other applications. The firm has two main product lines-the highest-quality product is called Safe-T, and a low-cost, value version is called Safe-V. Information on the factory conversion costs for EEI is as follows: Salaries. Supplies Factory expense EEI uses ABC to determine the unit costs of its products. The firm uses resource consumption cost drivers based on rough estimates of the amount that each activity consumes, as shown below. EEI has four activities: job setup, assembly, inspecting and finishing, and packaging. Salaries. Supplies Factory expense Factory Costs $ 846,000 146,000 546,000 $ 1,538,000 Setup 20% 25 Activities Setup Assembly Inspect and finishing Packaging Assembly 60% 60 90 Batch Units Inspecting and Finishing 15% The activity cost drivers for the two products are summarized below. Activity Driver 15 10 Finishing hours Packing hours Packaging 5% Total 100% 100 100

EyeGuard Equipment Inc. (EEI) manufactures protective eyewear for use in commercial and home applications. The product is also used by hunters, home woodworking hobbyists, and in other applications. The firm has two main product lines-the highest-quality product is called Safe-T, and a low-cost, value version is called Safe-V. Information on the factory conversion costs for EEI is as follows: Salaries. Supplies Factory expense EEI uses ABC to determine the unit costs of its products. The firm uses resource consumption cost drivers based on rough estimates of the amount that each activity consumes, as shown below. EEI has four activities: job setup, assembly, inspecting and finishing, and packaging. Salaries. Supplies Factory expense Factory Costs $ 846,000 146,000 546,000 $ 1,538,000 Setup 20% 25 Activities Setup Assembly Inspect and finishing Packaging Assembly 60% 60 90 Batch Units Inspecting and Finishing 15% The activity cost drivers for the two products are summarized below. Activity Driver 15 10 Finishing hours Packing hours Packaging 5% Total 100% 100 100

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4PB: Pocket Umbrella, Inc. is considering producing a new type of umbrella. This new pocket-sized...

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