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George Inc. manufactures two products for use in the manufacturing of mining equipment: PT gears and XR gears. During the past month the company
George Inc. manufactures two products for use in the manufacturing of mining equipment: PT gears and XR gears. During the past month the company produced 50 PT gears and 300 XR gears and incurred an estimated total overhead of $94,410. The company's accountant analyzed the overhead costs and determined the following with regards to the activities which caused the costs: Activity Budgeted Overhead Activity Driver Material handling Number of material moves $33,350 Machinery set up Inspections Number of set ups $28,500 Number of inspections $32,560 Total costs $94,410 The activity driver for each product and in total was as follows:
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