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Allocate overhead using a single plantwide rate, multiple department rates, and activity-based costing Downhill Sports Inc. manufactures two products: snowboards and skis. The factory
Allocate overhead using a single plantwide rate, multiple department rates, and activity-based costing Downhill Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor Cutting Department $360,000 250,000 Finishing Department Total 560,000 $1,170,000 The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities an Activity Budgeted Activity Cost Activity Base < Production control $90,000 Number of production runs Materials handling 270,000 Number of moves: Total $360,000 The activity-base usage quantities and units produced for the two products follow: Number of Production Runs Number of Direct Labor Hours- Moves Cutting Direct Labor Hours- Finishing Units Produced Snowboards 450 5,000 2,000 4,000 5,000 Skis 50 2,500 3,000 3,000 5,000 Total 500 7,500 5,000 7,000 10,000
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