Question
I 2. The following overhead cost information is available for the Joseph Corporation: Activity Allocation Base (Driver) Overhead Cost Purchasing Number of purchase orders
I 2. The following overhead cost information is available for the Joseph Corporation: Activity Allocation Base (Driver) Overhead Cost Purchasing Number of purchase orders $400,000 Receiving Number of shipments received 100,000 Machine setups Number of setups 400,000 Quality control Number of inspections 150,000 During the year 8,000 purchase orders were issued; 25,000 shipments were received; 4,000 machine setups occurred; and 7,500 inspections were conducted. Employees worked a total of 10,000 hours on production. 1. Determine the plantwide overhead rate, using the traditional overhead allocation method based on direct labor hours. 2. Determine the overhead rate for each of the activities, assuming that ABC is used.
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