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Exercise 7-6 Concord Machining makes three products. The company's annual budget includes $1,209,700 of overhead. In the past, the company allocated overhead based on expected
Exercise 7-6 Concord Machining makes three products. The company's annual budget includes $1,209,700 of overhead. In the past, the company allocated overhead based on expected capacity of 40,000 direct labor hours. The company recently implemented an activity-based costing system and has determined that overhead costs can be broken into four overhead pools: order processing, setups, milling, and shipping. The following is a summary of company information: Order processing Setups Milling Shipping Expected Cost $ 359,100 170,100 408,000 272,500 $ 1,209,700 Expected Activities 19,000 orders 4,200 setups 20,400 machine hours 25,000 shipments (a) Calculate the company's overhead rate based on direct labor hours. (Round answer to 2 decimal places, e.g. 15.25.) Overhead rate $ / DLH (b) Calculate the company's overhead rates using the activity-based costing pools. (Round answers to 2 decimal places, e.g. 15.25.) Order processing $ per order per setup Setups $ per machine hour Milling $ Shipping per shipment
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