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4. Paul Company manufactures two products (A and B). The overhead costs ($83,000) have been divided into four cost pools that use the following
4. Paul Company manufactures two products (A and B). The overhead costs ($83,000) have been divided into four cost pools that use the following activity drivers: Number of Number of Product Orders Setups Number of Labor Transactions Direct Labor Hours A 25 30 60 4,000 B 100 70 120 1,000 Cost per pool $20,000 $15,000 $18,000 $30,000 Additionally, Paul incurred the following amounts of direct materials and direct labor on products M and N: Direct materials Direct labor Total Required: A B Total $30,000 $35,000 $65,000 25,000 $55,000 30,000 55,000 $65,000 $120,000 a. Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. b. Determine the overhead costs assigned to products A and B using the single plantwide factory overhead rate determined in part (a) above. c. Determine the activity rate for each activity. d. Determine the activity (overhead) costs assigned to products A and B using the activity rates found in part c. e. Determine the total product costs assigned to products A and B using the activity rates found in part c.
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a To determine the single plantwide factory overhead rate using direct labor hours as the allocation base we need to divide the total overhead costs b...Get Instant Access to Expert-Tailored Solutions
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