Question
OrioleCo. incurs $158000of overhead costs each year in its three main departments, setup ($9700), machining ($111000), and packing ($37300). The setup department performs50setups per year,
OrioleCo. incurs $158000of overhead costs each year in its three main departments, setup ($9700), machining ($111000), and packing ($37300). The setup department performs50setups per year, the machining department works4000hours per year, and the packing department packs400orders per year. Information aboutOriole's 2 products is as follows:
Product OneProduct TwoNumber of setups2525Machining hours10003000Orders packed200200
If machining hours are used as a base, how much overhead is assigned to Product One each year?
$39500
$79000
$55500
$43620
Coronadomanufactures mattresses for the hotel industry. It has two products, Downy and Firm and total overhead of $504000. The company plans to manufacture150Downy mattresses and290Firm mattresses this year. In manufacturing the mattresses, the company must perform750material moves for the Downy and250for the Firm; it processes110purchase orders for the Downy and90for the Firm; and the company's employees work2500direct labour hours on the Downy product and3500on the Firm.Coronado's total material handling costs are $310000and its total purchasing costs are $194000.
Using ABC, how much overhead would be assigned to the Downy product?
$504000
$339200
$252000
$164800
CraneAccounting performs two types of services, Audit and Tax.Crane's overhead costs consist of computer support, $232000; and legal support, $113000. Information on the two services is:
AuditTaxDirect labour cost$60000$90000CPU minutes3500015000Legal hours used200800
Overhead applied to audit services using ABC is
$138000.
$160000.
$185000.
$207000.
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