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Chrom Co. manufactures two models, the XL and RD. It also has two departments, assembly and finishing. The company wants to assign overhead costs to
Chrom Co. manufactures two models, the XL and RD. It also has two departments, assembly and finishing. The company wants to assign overhead costs to its two different models to better understand the profitability of each model. The Tableau Dashboard provides data for our analysis. Estimated Overhead Costs by Estimated Direct Labor Hours & Department Machine Hours by Department 150,000 hrs 125,000 hrs 100,000 hrs Finishing 75,000 hrs Assembly Total: $8,000,000 Assembly 50,000 hrs Assembly 25,000 hrs Finishing Finishing Direct Labor Hours Machine Hours Estimated Overhead Costs by Cost Driver & Expected Usage Activity by Activity Supervision Maintenance Supervision Estimated Overhead Costs by Activity Cost Driver & Expected Usage by Activity Supervision Maintenance Supervision Total: $8,000,000 I Maintenance Note: Total overhead costs by department and total overhead costs by activity are equal. The costs are presented in two different ways here. 1. Using activity based costing and data from the lower half of the dashboard, compute activity rates for both maintenance and supervision Activity cost pool Expected Costs Activity Overhead Rate Expected Amount of Cost Driver 100,000 MH 125,000 DLM Maintenance Supervision per MH per DLH
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