Question
Company manufacturers two products (X and Y). Total overhead costs of $610,000 has been divided into four cost pools that use the following activity drivers:
Company manufacturers two products (X and Y). Total overhead costs of $610,000 has been divided into four cost pools that use the following activity drivers:
Produts machine hrs. Number of Setups Number of orders Number of Shpments Totals
X 1,000 200 500 1000
Y 3,000 50 300 500
Cost per pool $100,000 $230,000 $160,000 $120,000 $610,000
Required:
a) compute the allocation rates per each acitivity drivers listed above
b) what is the total overhead costs assigned to Products X and Y assuming that overhead costs are allocated using th activity-based costing method?
c) compute the plant-wide rate overhead rate based on machine hours
d) what is the total overhead costs assigned to the products X and Y assuming that overhead costs are allocated using the plant-wide rate calculated in part (c).
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