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Entry Rules: Round your answer to two ( 2 ) decimal places. Examples: If your answer is $ 2 4 , 5 0 0 .

Entry Rules:
Round your answer to two (2) decimal places.
Examples:
If your answer is $24,500.4718, enter 24500.47
If your answer is $24,500.4753, enter 24500.48
If your answer is $24,500.00, enter 24500.00
If your answer is $24,500, enter 24500.00
If your answer is $0.4718, enter 0.47
If your answer is ZERO, enter 0.00
Never enter $ or , when inputting numerical answers
QUESTION:
George Inc. manufactures two products for use in the manufacturing of mining equipment: PT gears and XR gears.
During the past month the company produced 50 PT gears and 300 XR gears and incurred an estimated total overhead of $94,410.
The company's accountant analyzed the overhead costs and determined the following with regards to the activities which caused the costs:
Activity Budgeted
Overhead Activity
Driver
Material handling Number of material moves $33,350
Machinery set up Number of set ups $28,500
Inspections Number of inspections $32,560
Total costs $94,410
The activity driver for each product and in total was as follows:
Activity
Driver PT Gears XR Gears Total
Number of material moves 5206301150
Number of set ups 170400570
Number of inspections 270470740
What is the activity rate that would be used for material handling?
HINT: remember to apply the entry rules.
What is the activity rate that would be used for machinery set up?
HINT: remember to apply the entry rules.
What is the activity rate that would be used for Inspections?
HINT: remember to apply the entry rules.
Assign the manufacturing overhead for the past month to the two products using activity based costing. What is the overhead cost PER UNIT for PT Gears?
HINT: calculate the total overhead assigned to each product and then divide by the number of products produced to determine the overhead cost per unit!
Assign the manufacturing overhead for the past month to the two products using activity based costing. What is the overhead cost PER UNIT for XR Gears?
HINT: calculate the total overhead assigned to each product and then divide by the number of products produced to determine the overhead cost per unit!
Assume, instead, that the company used a plantwide overhead rate and the cost driver of direct labour hours.
The company has the following information:
Cost Driver PT Gears XR Gears Total
Direct labour hours 5401,2601,800
What is the plantwide rate per direct labour hour?
Assign the manufacturing overhead for the month to each product using the plantwide overhead rate.
What is the per unit overhead cost for PT Gears if the company used the plantwide rate?
HINT: remember the entry rules!
What is the per unit overhead cost for XR Gears if the company used the plantwide rate?
HINT: remember the entry rules!

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