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4 Isadore's Implements, Inc., manufactures pens and mechanical pencils often used for gifts. Overhead costs are currently allocated using direct labor-hours, but the controller has
4 Isadore's Implements, Inc., manufactures pens and mechanical pencils often used for gifts. Overhead costs are currently allocated using direct labor-hours, but the controller has recommended an activity-based costing system using the following data: 14.28 points Activity Setting up Inspecting Packing and shipping Total overhead Cost Driver Number of setups Number of parts Number of boxes shipped Skipped Cost Driver Volume Pencils Pens 20 28 3 7 55,000 80,000 Cost $100,800 28,000 67,500 $196,300 eBook Required: a. Compute the amount of overhead to be allocated to each product under activity-based costing, b. Compute the amount of overhead to be allocated to each product using labor-hours as the allocation base. Assume that the number of labor-hours required to assemble each box is 0.1 for pencils and 0.1 for pens and that 55,000 boxes of pencils and 80,000 boxes of pens were produced during the period. Print References Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of overhead to be allocated to each product under activity-based costing. (Do not round intermediate calculations.) Overhead Pencils Pens Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of overhead to be allocated to each product using labor-hours as the allocation base. Assume that the number of labor-hours required to assemble each box is 0.1 for pencils and 0.1 for pens and that 55,000 boxes of pencils and 80,000 boxes of pens were produced during the period. (Do not round intermediate calculations and round your final answers to the nearest whole dollar.) Show less Overhead Pencils Pens
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