Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 21 Elle Inc. makes two types of handbags: standard and custom. The controller has decided to use a plant wide overhead rate based on
Question 21 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 af activity based costing and wants to see haw the results would differ if this system were used. Two activity cost poals were developed: machining and machine set-up. Presented helaw is information related to the company's aperations Standard Direct labour costs 50,000 Machine hours Set-up hours Custom $100,000 1,000 400 500 Total estimated overhead costs are $270,000. The overhead cost allocated to the machining activity cost pool is $168,000, and $102,000 is allocated to the machine set-up activity cest pool. (a) Your answer has been saved and sent for grading. See Gradebook for score details. Calculate the averhead rate using the traditional (plant wide) approach Predetermined overhead rate 180 % of direct labor cost STMTLAR EXERCISE Attempts: 1 of 1 used (b) Caloulate the overhead rate using the activity-based costing approach. Cost Pool Machining Overhead Rate per machine hour Machine set-up per set-up hour
Step 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