Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please answer both a and b Kustom Kar Parts expects to incur $480,000 in overhead costs in its three main production departments this year: setup
please answer both a and b
Kustom Kar Parts expects to incur $480,000 in overhead costs in its three main production departments this year: setup costs ($30,000), machining costs ($330,000), and packing costs ($120,000) to make two models of their exhaust systems. The setup department expects to perform 40 setups per year, the machining department expects to work 5,000 hours per year, and the packing department expects to pack 500 orders per year. Manufacturing information about Kustom's two exhaust system models follows: 3. EX-1 EX-2 Total Expected Use Number of setups Machining hours Orders packed Number of products manufactured 20 4,000 350 400 of Cost Drivers 40 5,000 500 1,000 1,000 150 600 a. If Kustom Kar Parts use a traditional costing method for applying overhead costs to production, how much overhead would be assigned to Product EX-1 each year assuming the use of machining hours as an application base? b. Using Activity Based Costing, how much overhead would be assigned to Product EX-1 each year, assuming the expected use of cost drivers for EX-1Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started