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Frederick Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs:
Frederick Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: (Click the icon to view the data.) Frederick Company expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 2,700 parts, require 10 setups, and consume 1,800 hours of finishing time. (Click the icon for completed job data.) Read the requirements. Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity. Mat. handling Mach setup Insertion + Activity cost =1 allocation rate per part per setup per part per hour Finishing + Requirement 2. Compute the manufacturing overhead cost that should be assigned to Job 420. Activity Materials handling Machine setup Insertion of parts MOH Cost
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