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Chapter 5 and 6 Overhead Assignment: Overhead Calculations Traditional Approach- Columbus Co. has determined the following overhead costs, activity cost pools and cost driver
Chapter 5 and 6 Overhead Assignment: Overhead Calculations Traditional Approach- Columbus Co. has determined the following overhead costs, activity cost pools and cost driver levels for the year: Activity Overhead Costs Activity Cost Driver Material handling $ 200,000.00 5,000 tons of materials Machine Setup $ 400,000.00 20,000 setup hours Machine operation $ 400,000.00 10,000 machine hours Factory expenses 50,000 direct labor is $ 500,000.00 hours Total Overhead Tons of materials Setup hours Machine hours Direct labor hours 4.00 19.00 9.00 42.00 The following data is for the production of one batch of a product X. Actual Overhead is $1,400 Traditional Volume Based Calculation: 1. What is the overhead rate if your cost driver is Machine hours? 2. Using your cost driver, what is applied Overhead? 3. Using your cost driver, are you over or under applied and by how much?
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