In the past, Troll House Cookies has used a single plant$-$wide rate to allocate their overhead costs. They want to see what their overhead would be using ABC to allocate manufacturing overhead costs. Use the following information to compare the single plant$-$wide allocation to the ABC allocation:

Activity Allocation Base Overhead Cost

Cleaning Direct Labor Hours $$10,000$

Oven Oven Hours $$47,500$

Packagaing Packaging Hours $$22,500$

The company produces two flavors of cookies: chocolate chip and snickerdoodle.

The quantity of each activity required for chocolate chip and snickerdoodle cookies is listed below.

Allocation Base Chocolate Chip Snickerdoodle

Direct Labor Hours $200200$

Oven Hours $5,5004,000$

Packaging Hours $250250$

Calculate the allocation rate for each activity:

Activity Allocation Rate

Cleaning $$25$ per setup

Oven $$5$ per order

Packagaing $$45$ per hour

Chocolate Chip Snickerdoodle

Allocation Base Quantity of Activity Activity Rate "Manufacturing

Overhead" Allocation Base Quantity of Activity Activity Rate "Manufacturing

Overhead"

Direct Labor Hours $200$ $$25$ $$5,000$ Direct Labor Hours $200$ $$25$ $$5,000$

Oven Hours $6,000$ $$530,000$ Oven Hours $3,500$ $$517,500$

Packaging Hours $300$ $$4513,500$ Packaging Hours $200$ $$459,000$

Total Manufacturing Overhead $$48,500$ Total Manufacturing Overhead $$31,500$

Reconcile Manufacturing Overhead

Total Estimated Manufacturing Overhead

Manufacturing Overhead allocated to Chocolate Chip $48,500$

Manufacturing Overhead allocated to Snickerdoodle $31,500$

Total Manufacturing Overhead Allocated $$80,000$