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Please clearly show part C's answers in bold, I have answered part A and B. Elle Inc. makes two types of handbags: standard and custom.
Please clearly show part C's answers in bold, I have answered part A and B.
Elle Inc. makes two types of handbags: standard and custom. The controller has decided to use a plant-wide overhead rate based on direct labour costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine set-up. Presented below is information related to the company's operations. Direct labour costs Machine hours Set-up hours Standard $50,000 500 100 Custom $100,000 1,000 400 Total estimated overhead costs are $210,000. The overhead cost allocated to the machining activity cost pool is $156,000, and $54,000 is allocated to the machine set-up activity cost pool. (a) Your answer is correct. Calculate the overhead rate using the traditional (plant-wide) approach. Predetermined overhead rate 140 % of direct labour cost eTextbook and Media Attempts: 1 of 3 used (b) (b) Your answer is correct. Calculate the overhead rate using the activity-based costing approach. Cost Pool Machining Overhead Rate 104 per machine hour $ Machine set-up $ 108 per set-up hour eTextbook and Media Attempts: 2 of 3 used (c) Determine the difference in allocation between the two approaches. (Enter negative answers using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Traditional costing (A) Activity-based costing (B) Difference (A) (B) Standard $ $ $ $ Custom $ $ $ $ $ TO IMAStep by Step Solution
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