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Makayla Company manufactures two products (AA and BB). The overhead costs ($110,000) have been divided into four cost pools that use the following activity drivers:
Makayla Company manufactures two products (AA and BB). The overhead costs ($110,000) have been divided into four cost pools that use the following activity drivers:
Number of Orders Number of Setups Number of Labor Transactions Labor Hours Product AA 20 20 50 3,000 BB 60 80 75 1,000 Cost per pool $32,000 $26,000 $12,000 $40,000 Additionally, Makayla incurred the following amounts of direct materials and direct labor on products AA and BB: AA BB Total Direct materials $60,000 $65,000 $125,000 Direct labor 45.000 55,000 100,000 Total $105,000 $120,000 $225000 Required: a. Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. b. Determine the total overhead costs assigned individually to products AA and BB using the single plantwide factory overhead rate determined in part (a) above. c. Determine the activity rate for each activity. d. Determine the total activity (overhead) costs assigned products AA and BB using the activity rates found in part c. e. Determine the total product costs assigned to products AA and BB using the activity rates found in part cStep by Step Solution
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