Saddle Inc. has two types of handbags: standard and customs. The controller has decided to use...
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Saddle Inc. has two types of handbags: standard and customs. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed machining and machine setup. Presented below is information related to the company's operations Standard Custom Direct labor costs $50,000 $100,000 Machine hours 1.200 1500 Setup hours 90 390 Total estimated overhead costs are $285,000 Overhead cost allocated to the machining activity cost pool is $109,000 and $96,000 allocated to the machine setup activity cost pool Compute the overhead rate using the traditional (plantwide) approach (Round answer to 2 decimal places, eg. 12.25 Predetermined overhead rate % of direct labor cost 3 eTextbook and Media Saddle Inc. has two types of handbags: standard and customs. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed machining and machine setup. Presented below is information related to the company's operations Standard Custom Direct labor costs $50,000 $100,000 Machine hours 1.200 1500 Setup hours 90 390 Total estimated overhead costs are $285,000 Overhead cost allocated to the machining activity cost pool is $109,000 and $96,000 allocated to the machine setup activity cost pool Compute the overhead rate using the traditional (plantwide) approach (Round answer to 2 decimal places, eg. 12.25 Predetermined overhead rate % of direct labor cost 3 eTextbook and Media
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