Question
Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs
Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs and for the two products appears below. Activity Driver Estimated Total Overhead Cost Jackets Hats Setups # of setups $ 200,000 500 setups 1,500 setups Ordering parts # of parts 300,000 60,000 parts 40,000 parts Machining # of machine hours 600,000 12,000 machine hrs. 6,000 machine hrs. Inspections # of inspections 400,000 10,000 inspections 40,000 inspections Shipping # of shipments 300,000 10,000 shipments 10,000 shipments Total overhead $1,800,000 If the company uses a single cost pool and assigns overhead using machine hours, how much overhead will be assigned to each hat?
Activity |
Driver | Estimated Total Overhead Cost |
Jackets |
Hats |
Setups | # of setups | $ 200,000 | 500 setups | 1,500 setups |
Ordering parts | # of parts | 300,000 | 60,000 parts | 40,000 parts |
Machining | # of machine hours | 600,000 | 12,000 machine hrs. | 6,000 machine hrs. |
Inspections | # of inspections | 400,000 | 10,000 inspections | 40,000 inspections |
Shipping | # of shipments | 300,000 | 10,000 shipments | 10,000 shipments |
Total overhead |
| $1,800,000 |
|
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