Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Lindo Ltd. manufactures deck chairs. Presently the company assigns overhead to each product using direct labour hours to calculate a plantwide rate. The following information

image text in transcribedimage text in transcribedimage text in transcribed

Lindo Ltd. manufactures deck chairs. Presently the company assigns overhead to each product using direct labour hours to calculate a plantwide rate. The following information is available for the upcoming year: Estimated factory overhead $890,000 Estimated direct labour hours 10,000 The company is considering implementing an activity-based costing system and has identified three activities. Resource drivers are used to assign costs to each activity. The following information about each activity is available: Total Estimated Activity Cost Driver Estimated Costs Driver Material handling $300,000 Parts 60,000 Assembly $400,000 Machine hours 50,000 Finishing $190,000 Direct labour hours 10,000 One of the models that the company produces uses the following resources: Chair AA 24 Parts Machine hours Direct labour hours 4 3 Required: Use the above information to answer the following questions about activity based costing. The plantwide predetermined overhead rate, using direct labour hours as the cost driver, is $ per direct labour hour. A/ Assume that the actual direct labour hours were 12,000 direct labour hours. If the company uses the plantwide rate, then the total applied overhead would be $ A/ Using the plantwide overhead rate, the total overhead applied to one unit of Chair AA is $ If the company decided to use activity-based costing, then the overhead rate for Material Handling would be $ per part. A If the company decided to use activity-based costing, then the overhead rate for Assembly would be $ per machine hour. A/ If the company decided to use activity-based costing, then the overhead rate for Finishing would be $_ per direct labour hour. Using the activity based costing system, the total overhead applied for all activities to one unit of Chair AA is $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Alan Webb, Theresa Libby

12th Canadian Edition

1260193276, 978-1260193275

More Books

Students also viewed these Accounting questions

Question

=+c. Savings as the Star focus on price.

Answered: 1 week ago

Question

=+b. Product-Focused emphasize product features.

Answered: 1 week ago