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Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct
Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct labor-hours. Listed below is cost driver information used in the product-costing system:
Overhead Cost Pool | Budgeted Overhead | Cost Driver | Estimated Cost Driver Level | ||||
Machine setups | $ | 120,000 | # of setups | 120 | setups | ||
Materials handling | 104,400 | # of barrels | 8,700 | barrels | |||
Quality control | 264,000 | # of inspections | 1,100 | inspections | |||
Other overhead cost | 144,000 | # of machine hours | 12,000 | machine hours | |||
Total overhead | $ | 632,400 | |||||
A current product order has the following requirements:
Machine setups | 8 | setups |
Materials handling | 606 | barrels |
Quality inspections | 80 | inspections |
Machine hours | 830 | machine hours |
Direct labor hour | 336 | hours |
how much manufacturing overhead will be assigned to the current product order if the firm assigns overhead cost choosing traditional system based on machine hrs?
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