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Forsythe, Inc. uses activity-based costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup,
Forsythe, Inc. uses activity-based costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the year and their allocation bases are as follows: (Click the icon to view the budgeted costs and activity bases.) Read the requirements. Requirement 1. Compute the predetermined overhead allocation rate for each activity. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest cent.) Requirements + Data table Predetermined OH = allocation rate Activity Total Budgeted Cost Allocation Base Materials handling Machine setup Insertion of parts 20,000 Number of parts 2,600 Number of setups 48,000 Number of parts 78,000 Finishing Finishing direct labor hours $ 148,600 Total 1. Compute the predetermined overhead allocation rate for each activity. 2. Job 86 required the production of 200 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. Forsythe expects to produce 500 chrome bumpers during the year. The bumpers are expected to use 4,000 parts, require 10 setups, and consume 1,000 hours of finishing time. Print Done Print Done
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