Brief Exercise 4-7

Spud, Inc. a manufacturer of gourmet potato chips, employs activity-based costing. The budgeted data for each of the activity cost pools is provided below for the year 2020.

Activity Cost Pools		Estimated Overhead		Estimated Use of Cost Drivers per Activity
Ordering and receiving		$101,568		13,800	orders
Food processing		483,125		62,500	machine hours
Packaging		1,783,500		435,000	labor hours

For 2020, the company had 11,000 orders and used 50,000 machine hours, and labor hours totaled 502,000.

Calculate the overhead rates for each activity. (Round answers to 2 decimal places, e.g. 12.25.)

		Overhead Rates
Ordering and receiving		$	per order
Food processing		$	per machine hour
Packaging		$	per labor hour

What is the total overhead applied?

Total overhead applied

$