Question
Jackets Galore, Inc. presently uses the traditional costing method for allocating overhead for their 6 lines of seasonal coats. The company is considering moving to
Jackets Galore, Inc. presently uses the traditional costing method for allocating overhead for their 6 lines of seasonal coats. The company is considering moving to an activity-based costing approach and provides the following information:
|
a) If the company allocated its overhead based on machine hours, what is the estimated overhead per machine hour?
$ per machine hour
b) If the company moves to an ABC approach, what would the overhead allocation be per activity cost pool?
Designing: $ per designer hour
Sizing and cutting: $ per machine hour
Stitching and trimming: $ per labour hour
Wrapping and packing: $ per finished unit
c) What would the overhead allocated under each method be based on actual activity in June?
Activity Cost Pools | Actual use of cost drivers per activity |
Designing | 900 designer hours |
Sizing and cutting | 10,000 machine hours |
Stitching and trimming | 7000 labour hours |
Wrapping and packing | 2500 finished units |
Traditional $
Designing: $
Sizing and cutting: $
Stitching and trimming $
Wrapping and packing: $
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