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Rose Inc. manufactures two products as follows: the Walter and the Gleason Rose Inc expects to manufacture 300 Walters and 800 GG. One Walter requires
Rose Inc. manufactures two products as follows: the Walter and the Gleason Rose Inc expects to manufacture 300 Walters and 800 GG. One Walter requires 5 direct labor-hours per unit, and one Gleason requires 2 direct labor- hours (DLH) per unit. Rose Inc. currently applies overhead using traditional costing using direct labor hours as the cost driver. Total estimated overhead is $426,000. . However, they are now considering switching to activity-based costing (ABC) with the following cost pools, activity measures and expected activity. Labor related cost pool with estimated overhead of $280,000 to be applied using DLHs. Order size cost pool with estimated overhead of $146,000 to be applied using machine hours (MHs). They expect to use 5,100 MHs for Walters and 3,900 MHs for Gleasons Rose Inc. manufactures two products as follows: the Walter and the Gleason Rose Inc expects to manufacture 300 Walters and 800 GG. One Walter requires 5 direct labor-hours per unit, and one Gleason requires 2 direct labor- hours (DLH) per unit. Rose Inc. currently applies overhead using traditional costing using direct labor hours as the cost driver. Total estimated overhead is $426,000. . However, they are now considering switching to activity-based costing (ABC) with the following cost pools, activity measures and expected activity. Labor related cost pool with estimated overhead of $280,000 to be applied using DLHs. Order size cost pool with estimated overhead of $146,000 to be applied using machine hours (MHs). They expect to use 5,100 MHs for Walters and 3,900 MHs for Gleasons
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