Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Private Corporation manufactures two types of transpondersno. 156 and no. 157and applies manufacturing overhead to all units at the rate of $79.00 per machine hour.

Private Corporation manufactures two types of transpondersno. 156 and no. 157and applies manufacturing overhead to all units at the rate of $79.00 per machine hour. Production information follows.

No. 156 No. 157
Anticipated volume (units) 7,000 16,500
Direct material cost $ 45 $ 70
Direct labor cost 50 30

The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours worked, and outgoing shipments, the activities' three respective cost drivers, follow.

No. 156 No. 157 Total
Setups 65 45 110
Machine hours worked 15,500 28,000 43,500
Outgoing shipments 125 85 210

The firm's total overhead of $3,436,500 is subdivided as follows: manufacturing setups, $265,000; machine processing, $2,665,000; and product shipping, $506,500.

Required:

  1. Compute the pool rates that would be used for manufacturing setups, machine processing, and product shipping in an activity-based costing system.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Version 3.0

Authors: Leah Kratz, Joe Ben Hoyle, C. J. Skender

3rd Edition

1453392904, 9781453392904

More Books

Students also viewed these Accounting questions

Question

Identify the primary goal of psychodynamic psychotherapy.

Answered: 1 week ago