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Sheridan Inc, has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs.
Sheridan Inc, has two types of handbags: standard and custom. 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 rewults would differ if this system were used, Two activity cost pools were developed: machining (machine hours) and machine setup (number of sotups). The total estimated machine hours is 2.400 , and the total estimated number of setups is 510 . Presented below is information related to the company's operations. Total estimated overhead costs are $306,000. Overhead cout allocated to the machining activity cost pool is $204,000, and $102.000 is allocated to the machine setup activity cost pool Compute the overhead rate using the traditional (plantwide) approach information related to exch product's use of cost drivers. (Round arawer to 0 decinal places, es. 12) Predetermined overhead rate \% of direct labor cost Compute the overhead rates using the activity-based costing aporosch Machining per machine hour Machine setup per setup hour Determine the difference in aliocation between the two approaches
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