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Marigold Machining makes three products. The company's annual budget includes $ 1,183,500 of overhead. In the past, the company allocated overhead based on expected capacity
Marigold Machining makes three products. The company's annual budget includes $ 1,183,500 of overhead. In the past, the company allocated overhead based on expected capacity of 40,000 direct labor hours. The company recently implemented an activity-based costing system and has determined that overhead costs can be broken into four overhead pools: order processing, setups, milling, and shipping. The following is a summary of company information: Expected Cost Expected Activities Order processing $ 282,200 17,000 orders Setups 5,000 setups 202,500 426,300 Milling 20,300 machine hours Shipping 272,500 25,000 shipments $ 1,183,500 (a) Calculate the company's overhead rate based on direct labor hours. (Round answer to 2 decimal places, e.g. 15.25.) /DLH Overhead rate $ (b) Calculate the company's overhead rates using the activity-based costing pools. (Round answers to 2 decimal places, e.g. 15.25.) Order processing $ per order 0 per setup Setups 0 per machine hour Milling 0 Shipping per shipment
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