Question
5) The controller for Ocean Sailboats Inc., a company which uses an automated process to make sailboats, established the following overhead cost pools and cost
5) The controller for Ocean Sailboats Inc., a company which uses an automated process to make sailboats, established the following overhead cost pools and cost drivers: Overhead Cost Pool Budgeted Overhead Cost Driver Estimated Cost Driver Level Machine setups $250,500 # of setups 500 setups Quality control 419,500 # of inspections 2,500 inspections Other overhead cost 180,000 # of machine hrs 20,000 machine hrs A recent order for sailboats used: Machine setups 50 setups Quality inspections 305 inspections Machine hours 2,024 machine hours Required: 1. What is the overhead rate per machine hour if the number of machine hours is used as a single cost driver under traditional costing system? 2. Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver? 3. Utilizing ABC, how much total overhead is assigned to the order?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started