Question
46. A company has two products: A and B. It uses a plantwide overhead allocation method based on activity 2 and has prepared the following
46. A company has two products: A and B. It uses a plantwide overhead allocation method based on activity 2 and has prepared the following analysis showing budgeted costs and activities. Use this information to compute (a) the company's plantwide overhead rate and (b) the amount of overhead allocated to Product A.
| Budgeted Activity |
| |||
| Activity Cost Pool | Budgeted Overhead Cost | Product A | Product B | Total
|
| Activity 1 | $160,000 | 400 | 1,600 | 2,000 |
| Activity 2 | $110,000 | 2,000 | 1,000 | 3,000 |
| Activity 3 | $180,000 | 1,200 | 10,800 | 12,000 |
| Total budgeted overhead | $450,000 |
47. A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted costs and activities. Use this information to compute (a) the company's overhead rates for each of the three activities and (b) the amount of overhead allocated to Product A.
| Budgeted Activity
| ||||
| Activity Cost Pool | Budgeted Overhead Cost | Product A | Product B | Total |
| Activity 1 | $160,000 | 400 | 1,600 | 2,000 |
| Activity 2 | $110,000 | 2,000 | 1,000 | 3,000 |
| Activity 3 | $180,000 | 1,200 | 10,800 | 12,000 |
| Total budgeted overhead | $450,000 |
48. A company has two products: AA and BB. It uses a plantwide overhead allocation method based on activity 33 and has prepared the following analysis showing budgeted costs and activities. Use this information to compute the company's plantwide overhead rate.
| Budgeted Activity
| ||||
| Activity Cost Pool | Budgeted Overhead Cost | Product AA | Product BB | Total |
| Activity 11 | $40,000 | 100 | 400 | 500 |
| Activity 22 | $55,000 | 500 | 250 | 750 |
| Activity 33 | $90,000 | 300 | 1,700 | 2,000 |
| Total budgeted overhead | $185,000 |
50. Superior Products Manufacturing identified the following data in its two production departments.
| Assembly | Finishing | |
| Manufacturing overhead costs | $225,000 | $420,000 |
| Direct labor hours worked | 6,600 DLH | 9,000 DLH |
| Machine hours used | 2,400 MH | 5,200 MH |
Make the following independent calculations (Round to two decimals). a. Compute a plantwide overhead rate using machine hours as the allocation base. b. Compute a plantwide overhead rate using direct labor hours as the allocation base.
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