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correct answer please EcoFabrics has budgeted overhead costs of $982,800. It has assigned overhead on a plantwide basis to its two products (wool and cotton)
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EcoFabrics has budgeted overhead costs of $982,800. It has assigned overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 468,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Total estimated machine hours is 208,000, and total estimated number of setups is 1,560. Overhead allocated to the cutting cost pool is $374,400 and $608,400 is allocated to the design cost pool. Additional information related to product usage by these pools is as follows. What amount of overhead would be assigned to the wool and cotton product lines using the traditional approach, assuming direct labor hours were incurred evenly between the wool and cotton Step by Step Solution
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