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EcoFabrics has budgeted overhead costs of $1,152,900. It has assigned overhead on a plantwide basis to its two products (wool and cotton) using direct labor
EcoFabrics has budgeted overhead costs of $1,152,900. It has assigned overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 549,000 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 244,000 , and tatal estimated number of setups is 1,830. Overhead allocated to the cutting cost pool is $439,200 and $713,700 is allocated to the design cost pool. Additional information related to product usage by these pcols is as follows. (a1) Calculate the overhead rate using activity based costing. (Round per mochine hour to 2 decimal places, e.g 12.25.) (a2) Your answer is correct Determine the amaunt of overhead assigned to the wool product line and the cotton praduct line using activity-based costing. Attempts: 1 of 2 used (b1) Your answer is correct. Calculate the overhead rate using traditional approach. (Round answer to 2 decimal places, eg. 1225) Overhead rates using the traditional appraach $ per direct labor hour eTextbook and Media Attempts: 1 of 2 used (b2) X Yaur answer is incarrect What amount of averhead would be assigned to the wool and cotton product lines using the traditional approach, assuming direct Hbor haurs were incurred evenly between the woal and cotton
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