Question $3$ of $10$

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Calculate the cost that is assigned to the car and truck product lines using an activity$-$based costing system, given the following information:

$\backslash$table$[[,\backslash$table$[[$Use of Cost Drivers$],[$per Product$]]],[$Number of set$-$ups,$140,460],[$Direct labour hours,$21,000,16,000],[$Number of inspections,$65,619]]$

Overhead assigned $${|}_r||$ Truck

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Chapter $5$

Question $3$ of $10$

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Sandhill Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Thomas Taylor, has developed the following information:

$\backslash$table$[[,$Car,,Truck$],[$Estimated wheels produced,$47,000,,14,000],[$Direct labour hours per wheel,$2,8,]]$

Total estimated overhead costs for the two product lines are $$1,030,000.$

Your answer is correct.

Calculate the overhead cost assigned to the car wheels and truck wheels, assuming that direct labour hours are used to allocate overhead costs.

relate to the truck wheel product line because of its complexity. He therefore develops the following three activity cost pools and related cost drivers to better understand these costs:

$\backslash$table$[[$Activity Cost Pools,$\backslash$table$[[$Estimated Overhead$],[$Costs$]],$Estimated Use of Cost Drivers$],[$Setting up machines,$$318,000,600$ set$-$ups$],[$Assembling$,370,000,37,000$ labour hours$],[$Inspection$,342,000,684$ inspections$]]$

Calculate the activity$-$based overhead rates for these three cost pools.

$\backslash$table$[[$Cost Pool,,Rate,$],[$Setting up machines,$$,,$per set$-$up$],[$Assembling$,$$$,10,$per labour hour$],[$Inspection$,$$$,,$per inspection$]]$

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Question $3$ of $10$

$\frac{0\mathrm{.}67}{1}$

Calculate the cost that is assigned to the car and truck product lines using an activity$-$based costing system, given the following information:

$\backslash$table$[[,\backslash$table$[[$Use of Cost Drivers$],[$per Product$]],],[$Number of set$-$ups,$140,460],[$Direct labour hours,$21,000,16,000],[$Number of inspections,$65,619]]$

Car

Overhead assigned $$$ Truck

$$

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