Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need part B answered. Part A is already answered but the whole question in included FYI. Canarie Company has been allocating overhead to individual product

Need part B answered. Part A is already answered but the whole question in included FYI.

Canarie Company has been allocating overhead to individual product lines based on each line's relative shares of direct labor hours. For the upcoming year, the company estimated that manufacturing overhead will be $1,989,380 and estimated direct labor hours will be 111,700. The company also has the following estimates:

Cost PoolCost DriverTotal AmountTotal Amount

of ActivityMaintenance costsDirect labor hours$826,580111,700Setup costsNumber of setups514,800220Engineering costsNumber of design changes648,000400$1,989,380

Among many other products, Canarie has two switches, Standard and Elite switches. Standard switches are a high-volume product that the company makes in large batches, while Elite switches are a specialty product that is fairly low in sales volume.

Information about Standard and Elite usage of the different activities follows:

StandardEliteDirect labor hours3,200310Number of setups115Number of design changes322

(a)

Your answer is correct. Calculate the predetermined overhead rate based on direct labor hours (traditional allocation). (Round answer to 2 decimal places, e.g. 15.25.)

Predetermined overhead rate$

17.81

per DLH

Use this predetermined overhead rate to calculate the amount of overhead to apply to Standard and Elite switches, based on their usage of direct labor hours. (Round answers to 0 decimal places, e.g. 125.)

StandardEliteOverhead allocated$

56992

$

5521

(b)

Calculate the individual ABC pool rates by taking the total amount of overhead for each cost pool and dividing that total by the total amount of activity for that pool. (Round maintenance costs pool rate to 2 decimal places, e.g. 15.25 and other answers to 0 decimal places, e.g. 125.)

Cost PoolCost pool rateMaintenance costs$

/DLHSetup costs$

/setupEngineering costs$

/design change

Allocate overhead to each of the two products using these three activity rates. (Round answers to 0 decimal places, e.g. 125.)

Maintenance CostsSetup CostsEngineeringTotal MOHStandard$

$

$

$

Elite$

$

$

$

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_2

Step: 3

blur-text-image_3

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

Principles Of Financial Accounting

Authors: Belverd E Needles, Marian Powers

11th Edition

0538755164, 9780538755160

More Books

Students also viewed these Accounting questions

Question

What are the assumptions required of a multiple regression model?

Answered: 1 week ago

Question

5. How quickly can we manage to collect the information?

Answered: 1 week ago

Question

3. Tactical/strategic information.

Answered: 1 week ago

Question

3. To retrieve information from memory.

Answered: 1 week ago