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please show work EcoFabrics has budgeted overhead costs of $1,105,650. It has allocated overhead on a plantwide basis to its two products (wool and cotton)
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EcoFabrics has budgeted overhead costs of $1,105,650. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 526,500 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $421.200 and $684,450 is allocated to the design cost pool. Additional information related to these pools is as follows. Wool 117,000 1.170 Cotton 117.000 Machine hours Number of setups Total 234,000 1.755 585 Calculate the overhead rate using activity based costing. (Round answers to 2 decimal places, eg. 12.25.) Overhead rates for activity-based costing Cutting $ 1.80 per machine hour Design 390.00 per setup Determine the amount of overhead allocated to the wool product line and the cotton product line using activity-based costing. Cotton product line Wool product line 666,900 Overhead Allocated $ 438,750 Calculate the overhead rate using traditional approach. (Round answer to 2 decimal places, eg. 12.25.) Overhead rates using the traditional approach $ 2.10 per direct labor hour What amount of overhead would be allocated to the wool and cotton product lines using the traditional approach, assuming direct labor hours were incurred evenly between the wool and cotton? Wool product line Cotton product line Overhead Allocated $ Step by Step Solution
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