Question
Nile Corp. has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool Overhead Costs Cost
Nile Corp. has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
Cost Pool | Overhead Costs | Cost Driver | Activity Level |
Supervision | $325,000 | Direct Labor Hours | 280,000 |
Maintenance | $135,000 | Machine Hours | 70,000 |
Facility Rent | $250,000 | Square Feet | 35,000 |
Total Overhead Costs | $710,000 |
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The accounting records show the Mossman Job consumed the following resources:
Cost driver Actual level
Direct labor-hours 1,700
Machine-hours 240
Square feet of area 50
If Nile Corp. uses the three activity cost pools to allocate overhead costs, what are the activity-cost driver rates for supervision of direct labor, machine maintenance, and facility rent, respectively?
a. What is the activity rate for Supervision cost pool?
b. What is the activity rate for Maintenance cost pool?
c. What is the activity rate for Facility Rent cost pool?
d. How will MOH be allocated to Job M?
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