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Sonoma Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Production is 700,000 units of Budget
Sonoma Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Production is 700,000 units of Budget and 200,000 units of Deluxe. Information is presented below: Cost Drivers by Product Estimated Activity Cost Pool Cost Driver Overhead Budget Deluxe Ordering and Receiving Orders $120,000 600 400 Machine Setup $297,000 500 400 Setups Machine hours Machining $1,000,000 150,000 100,000 Assembly Parts $1,400,000 1,200,000 800,000 Inspections 550 450 Inspection Total $300,000 $3,117,000 Round answers to the nearest cent. a. Required: Assume simple costing system used machine hours only as the single cost allocation base. 1. Compute a single overhead rate 2. Compute the amount of overheads allocated to Budget and Deluxe. 3. Compute the amount of overhead per unit allocated to Budget and Deluxe. b. Compute total overhead costs assigned to each product and the overhead cost per unit for each product, using activity-based costing
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