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Marigold has budgeted overhead costs of $1,096,200. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor
Marigold has budgeted overhead costs of $1,096,200. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 522,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups) Overhead allocated to the cutting cost poolis $417,600 and $678,600 is allocated to the design cost pool. Additional information related to these pools is as follows. Machine hours Number of setups Wool 116,000 1.160 Cotton 116.000 580 Total 232.000 1.740 Calculate the overhead rate using activity based costing. (Round answers to 2 decimal places, eg. 12.25.) Overhead rates for activity-based costing Cutting $ 1.80 per machine hour Design 390 per setup Determine the amount of overhead allocated to the wool product line and the cotton product line using activity-based costing Wool product line Cotton product line Overhead Allocated $ $ (61) The parts of this question must be completed in order. This part will be available when you complete the part above. (62) The parts of this question must be completed in order. This part will be available when you complete the part above
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