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Exercises Assign ES-17 Elle has two tylk.s of hamibags: standard and custom. The controller has &cided to use o verheai traditional costing ABC. a
Exercises Assign ES-17 Elle has two tylk.s of hamibags: standard and custom. The controller has &cided to use o verheai traditional costing ABC. a plant-wi& overlead rate based on direct labour costs. TIE presi&nt has heard of activity- costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machilE set-up. Preented below is information related to the company's operations. S tandard Direct labour costs $50,011) MachilE hours Set-up ho urs Custom Total estimated overlead costs are $277 ,500. The overhead cos t allocated to the machining activity cost pool is $177 and $1 is allated to the machine set-up activity cost pool. Instructions (a) Calculate the overhead rate using the traditional (plant-wi&) approach. (b) Calculate the overhead rate using the activity-based costing approach Determine the differee in allation the two approhes.
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