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S4-5 Use ABC to allocate overhead ABC Allocation Rates: Manufacturing Activity Overhead Preparation $510,000 Cooking and Draining $928,000 Packaging $400,000 Allocation. Cost Driver Rate
S4-5 Use ABC to allocate overhead ABC Allocation Rates: Manufacturing Activity Overhead Preparation $510,000 Cooking and Draining $928,000 Packaging $400,000 Allocation. Cost Driver Rate Preparation time $60/hr Cooking and draining time $29/hr Units packaged $0.10/unit NatureMade Snacks just received an order to produce 12,000 single-serving bags of gourmet, fancy-cut, sweet potato chips. The order will require 21 preparation hours and 36 cooking and draining hours. Use the activity rates you calculated in S4-4 to compute the following: 1. What is the total amount of manufacturing overhead that should be allocated to this order? 2. How much manufacturing overhead should be assigned to each bag? 3. What other costs will the company need to consider to determine the total manufacturing costs of this order?
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