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Crane Co.computed an activity-based overhead rate for machining costs ($300000) of $5 per machine hour. Machining costs are driven by machine hours. If computed based
Crane Co.computed an activity-based overhead rate for machining costs ($300000) of $5 per machine hour. Machining costs are driven by machine hours. If computed based on direct labor hours, the activity-based overhead rate for machining costs would be $10 per direct labor hour. The company produces two products, Cape and Chap. Cape requires 36000 machine hours and 20000 direct labor hours, while Chap requires 24000 machine hours and 30000 direct labor hours. Using activity-based costing, the machining overhead cost assigned to each product is Cape Chap $180000 $120000 $200000 $300000 $750000 $250000 $152727 $147273
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