Question
Hello, I have a cost accounting question. Washie manufactures two types of products for washing vehicles: the washing mitt, and the polishing cloth. Up to
Hello, I have a cost accounting question.
Washie manufactures two types of products for washing vehicles: the washing mitt, and the polishing cloth. Up to this point, Washie has been utilizing traditional costing with one plant-wide overhead rate using machine hours as the allocation base. During the year, the company sold 100,000 washing mitts and 50,000 polishing cloths. The company expected has determined the expected activity for each of the product lines:
Assuming the predetermined overhead rate is $10.00, what is the total overhead allocated to each washing mitt using the current costing system?
Activity Measure | Washing Mitt | Polishing Cloth |
# of design hours | 50 | 5 |
# of setups | 30 | 20 |
# of meters of fabric | 4,000 | 1,000 |
# of machine hours | 40,000 | 10,000 |
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