Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Comparing ABC and Plantwide Overhead Cost Assignments The Sabroso Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs: Setting

Comparing ABC and Plantwide Overhead Cost Assignments

The Sabroso Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs:

Setting up equipment $410,000
Other overheard $860,000

Setting up equipment is based on setup hours, and other overhead is based on oven hours. Sabroso produces two products, Fudge and Cookies. Information on each product is as follows:

Fudge Cookies
Units produced 5,000 25,000
Setup hours 4,500 1,500
Oven hours 2,500 4,500

Required:

Round your answers to the nearest whole dollar, unless otherwise directed.

1. Calculate the activity rate for (a) setting up equipment and (b) other overhead.

a. Setting up equipment $ per setup hour
b. Other overhead $ per oven hour

2. How much total overhead is assigned to Fudge using ABC? $

3. What is the unit overhead assigned to Fudge using ABC? Round to the nearest cent. $ per unit

4. Now, ignoring the ABC results, calculate the plantwide overhead rate, based on oven hours. $ per oven hour

5. How much total overhead is assigned to Fudge using the plantwide overhead rate? $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How To Perform A GDPR Compliance Audit

Authors: Kieran McLaughlin

1st Edition

1798935120, 978-1798935125

More Books

Students also viewed these Accounting questions

Question

22. Comparing Copier Volume, Ease of Use, and Speed

Answered: 1 week ago

Question

What is the relationship between humans and nature?

Answered: 1 week ago