Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders. Model Annual Sales in Units High F

National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders.

Model Annual Sales in Units
High F 11,300
Great P 17,300

National uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows:

High F Great P
Direct materials $ 39.30 $ 26.70
Direct labor $ 18.90 $ 14.50

Budget factory overhead:
Engineering and Design 2,660 engineering hours $ 425,600
Quality Control 13,090 inspection hours 350,190
Machinery 33,970 machine hours 541,600
Miscellaneous Overhead 26,650 direct labor hours 132,650
Total $ 1,450,040

National's controller had been researching activity-based costing and decided to switch to it. A special study determined National's two products have the following budgeted activities:

High F Great P
Engineering and design hours 1,090 1,570
Quality control inspection hours 5,770 7,320
Machine hours 20,410 13,560
Labor hours 12,130 14,520

What is the overhead application rate using the firm's volume-based costing system? (Rounded to the nearest percent or cents.)

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

Ethics Management Auditing And Developing The Ethical Content Of Organizations

Authors: S.P. Kaptein

1st Edition

0792350960, 978-0792350965

More Books

Students also viewed these Accounting questions