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4 PES Problem D:C&W Corporation manufactures travel clocks and watches, Overhead costs are currently allocated using direct labor hours, but the controller has recommended using
4 PES Problem D:C&W Corporation manufactures travel clocks and watches, Overhead costs are currently allocated using direct labor hours, but the controller has recommended using an activity-based costing system based on the following data: Activity Cost Driver Cost assigned Travel Clocks Watches Production setup Setups $100,000 20 setups 30 setups Material handling and requisition Parts $30,000 24 parts 36 parts Packaging and shipping Units shipped $60,000 80,000 units 120,000 units Total overhead $190,000 Compute the amount of total overhead allocated to each product using labor-hours as the allocation base. Assume labor-hours required to assemble each unit are 5 per travel clock and 1.0 per watch, and that 80,000 travel clocks and 120,000 watches were produced. (8 points) Calculate OH PDHR- Total Overhead Total Direct Labor Hrs (hint: add clocks and watches) /Direct Labor Hr Units Produced x Labor Required = Total Direct Labor Calculate Actual Direct Labor Used Travel Clocks 80.000 0.5 DL Per Clock Watches 120,000 10 DL Per Watch Applied Overhead Travel Clocks Watches Iavel Clocks Watches Overhead Applied (Actual DL XPDHR)
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