Question
Question 4 Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year: Cost Pools Budgeted Cost Cost Driver Cost
Question 4
Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year:
Cost Pools | Budgeted Cost | Cost Driver | Cost Driver Level | |||
Setup | $ | 170,000 | Number of setups | 850 | ||
Ordering | 85,000 | Number of orders | 4,250 | |||
Maintenance | 212,500 | Machine hours | 21,250 | |||
Power | 42,500 | Kilowatt hours | 42,500 | |||
Total direct labor hours budgeted = 8,500 hours.
The following data applies to Product X, one of the products completed during the year.
Direct materials | $ | 4,250 |
Direct labor | $ | 5,100 |
Units completed | 425 | |
Direct labor hours | 170 | |
Number of setups | 17 | |
Number of orders | 34 | |
Machine hours | 170 | |
Kilowatt hours | 425 | |
If the activity-based cost drivers are used to allocate overhead cost, the total overhead cost of Product X will be:
Multiple Choice
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$6,145.
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$6,205.
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$8,500.
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$10,200.
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$7,205.
Zeta Company is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of manufacturing overhead that should be assigned to each of the two product lines from the information given below.
Wall Mirrors | Specialty Windows | |||
Total units produced | 15 | 15 | ||
Total number of material moves | 3 | 9 | ||
Direct labor hours per unit | 105 | 105 | ||
Budgeted material-handling costs are $60,000.
The material-handling cost per wall mirror under ABC is:
Multiple Choice
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$0.
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$1,000.
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$800.
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$4,000.
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$3,900.
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