Question 6 of 6 - / 1 View Policies Current Attempt in Progress Shaker Stairs Co.designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and widths. All are of white oak wood. Budgeted manufacturing overhead costs for the year 2020 are as follows. Overhead Cost Pools Amount Purchasing $75,000 Handling materials 82.000 Production (cutting, milling, finishing) 220,000 Setting up machines 100.000 Inspecting 120.000 Inventory control (raw materials and finished goods) 126.000 Utilities 270,000 Total budgeted overhead costs $993.000 For the last 4 years, Shaker Stairs Co, has been charging overhead to products on the basis of machine hours. For the year 2020, 100,000 machine hours are budgeted Jeremy Nolan, owner-manager of Shaker Stairs Co, recently directed his accountant, Bil Seagren, to implement the activity based costing system that he has repeatedly proposed. At Jeremy Nolan's request, Bill and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools. Activity Cost Pools Purchasing Handling materials Cost Drivers Number of orders Number of moves Estimated Use of Cost Drivers 600 8.000 Question 6 of 6 cost Brivers and their usage for the previously budgeted overhead cost pools. Activity Cost Pools Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Inspecting Inventory control (raw materials and finished goods) Utilities Cost Drivers Number of orders Number of moves Direct labor hours Number of setups Number of inspections Number of components Square feet occupied Estimated Use of Cost Drivers 600 8,000 100,000 1.250 6,000 168,000 90,000 Steve Hannon, sales manager, has received an order for 250 stairways from Community Builders, Inc., a large housing deve contractor At Steve's request, Bill prepares cost estimates for producing components for 250 stairways so Steve can subm contract price per stairway to Community Builders. He accumulates the following data for the production of 250 stairways Direct materials Direct labor Machine hours Direct labor hours Number of purchase orders Number of material moves Number of machine setups Number of Inspections Number of components Number of square feet occupied $104,000 $112,800 15,000 5,300 60 800 100 450 16.000 8.000 MacBook Air (a) Compute the predetermined overhead rate using traditional costing with machine hours as the basis. (Round answer to 2 decimal places, e.3. 12.25.) Predetermined overhead rate $ per machine hour eTextbook and Media Save for Later Attempts: 0 of 5 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above. (c1) The parts of this question must be completed in order. This part will be available when you complete the part above MacBook Air
