hosmer industries provides the following information about resources and usage: unused resources capacity…

hosmer industries provides the following information about resources and usage: unused resources capacity cost driver volume resources used materials $ 6,400 6,400 pounds power 3,904 272 hours setups 2,120 62 setups purchasing 4,640 64 purchase orders client assistance 18,560 40 inquiries supervision 8,480 256 labor - hours facility cost 7,040 3,360 square meters resources supplied materials $ 339,200 power 47,424 setups 58,912 purchasing 60,960 client assistance 38,400 supervision 74,016 facility cost 121,280 exercise 10 - 50 (algo) part a required: a. compute the cost driver rate for each resource. note: round your answers to the nearest whole dollar amount. cost driver rate materials per pound power per hour setups per setup purchasing per order client assistance per inquiry supervision per labor - hour facility cost per square meter

hosmer industries provides the following information about resources and usage: unused resources capacity cost driver volume resources used materials $ 6,400 6,400 pounds power 3,904 272 hours setups 2,120 62 setups purchasing 4,640 64 purchase orders client assistance 18,560 40 inquiries supervision 8,480 256 labor - hours facility cost 7,040 3,360 square meters resources supplied materials $ 339,200 power 47,424 setups 58,912 purchasing 60,960 client assistance 38,400 supervision 74,016 facility cost 121,280 exercise 10 - 50 (algo) part a required: a. compute the cost driver rate for each resource. note: round your answers to the nearest whole dollar amount. cost driver rate materials per pound power per hour setups per setup purchasing per order client assistance per inquiry supervision per labor - hour facility cost per square meter

Answer

Explanation:

Step1: Define cost - driver rate formula

The cost - driver rate formula is $\text{Cost Driver Rate}=\frac{\text{Cost of Resources Used}}{\text{Cost Driver Volume}}$.

Step2: Calculate cost - driver rate for Materials

For Materials, $\text{Cost of Resources Used}=$6,400$ and $\text{Cost Driver Volume}=6,400$ pounds. So, $\text{Cost Driver Rate}=\frac{6400}{6400}=1$ dollar per pound.

Step3: Calculate cost - driver rate for Power

For Power, $\text{Cost of Resources Used}=$3,904$ and $\text{Cost Driver Volume}=272$ hours. So, $\text{Cost Driver Rate}=\frac{3904}{272}\approx14$ dollars per hour.

Step4: Calculate cost - driver rate for Setups

For Setups, $\text{Cost of Resources Used}=$2,120$ and $\text{Cost Driver Volume}=62$ setups. So, $\text{Cost Driver Rate}=\frac{2120}{62}\approx34$ dollars per setup.

Step5: Calculate cost - driver rate for Purchasing

For Purchasing, $\text{Cost of Resources Used}=$4,640$ and $\text{Cost Driver Volume}=64$ purchase orders. So, $\text{Cost Driver Rate}=\frac{4640}{64}\approx73$ dollars per order.

Step6: Calculate cost - driver rate for Client assistance

For Client assistance, $\text{Cost of Resources Used}=$18,560$ and $\text{Cost Driver Volume}=40$ inquiries. So, $\text{Cost Driver Rate}=\frac{18560}{40}=464$ dollars per inquiry.

Step7: Calculate cost - driver rate for Supervision

For Supervision, $\text{Cost of Resources Used}=$8,480$ and $\text{Cost Driver Volume}=256$ labor - hours. So, $\text{Cost Driver Rate}=\frac{8480}{256}\approx33$ dollars per labor - hour.

Step8: Calculate cost - driver rate for Facility cost

For Facility cost, $\text{Cost of Resources Used}=$7,040$ and $\text{Cost Driver Volume}=3,360$ square meters. So, $\text{Cost Driver Rate}=\frac{7040}{3360}\approx2$ dollars per square meter.

Answer:

Materials: 1 dollar per pound Power: 14 dollars per hour Setups: 34 dollars per setup Purchasing: 73 dollars per order Client assistance: 464 dollars per inquiry Supervision: 33 dollars per labor - hour Facility cost: 2 dollars per square meter