Question
Coronado, Inc. produces two types of gas grills: a family model and a deluxe model. Coronados controller has decided to use a plantwide overhead rate
Coronado, Inc. produces two types of gas grills: a family model and a deluxe model. Coronados controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the companys operations:
Family Model | Deluxe Model | |||
---|---|---|---|---|
Direct labor costs | $ 77,100 | $ 154,200 | ||
Machine hours | 2,000 | 2,000 | ||
Setup hours | 200 | 800 |
Total estimated overhead costs are $ 462,600. Overhead cost allocated to the machining activity cost pool is $ 277,560 and $ 185,040 is allocated to the machine setup activity cost pool.
Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 15.25.)
Overhead rate: |
please answer this question only if you are comfortable with this material, I have already asked this question and was completely led wrong.
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