Answered step by step
Verified Expert Solution
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
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started