Global Enterprises has identified three cost pools and three corresponding cost drivers to allocate overhead costs. The following estimates are provided for the coming year:

Cost Pool	Overhead Costs	Cost Driver	Activity Level
Supervision of direct labor	$480,000	Direct labor-hours	800,000
Machine maintenance	$220,000	Machine-hours	550,000
Facility rent	$260,000	Square feet of area	100,000
Total overhead costs	$960,000

The accounting records show the Leaf Job consumed the following resources:

Cost Driver	Activity Level
Direct labor-hours	600
Machine-hours	2,100
Square feet of area	90

If direct labor-hours are considered as the only overhead cost driver, what is the single cost driver rate for Global Enterprises?

Using direct labor-hours as the only overhead cost driver, what is the amount of overhead costs allocated to the Leaf Job?

Global Enterprises uses the three activity cost pools to allocate overhead costs, what are the activity-cost driver rates for the supervision of direct labor, machine maintenance, and facility rent, respectively?

Using the three cost pools to allocate overhead costs, what is the total amount of overhead costs to be allocated to the Leaf Job?

Which method of allocation probably best estimates actual overhead costs used for Global Enterprises? Why?

Answer rating: 100% (QA)

Single Cost Driver Rate for Direct LaborHours Total overhead costs 960000 Total direct laborhours 80... View the full answer