Question
Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to allocate the overhead costs
Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to allocate the overhead costs to the projects. The activities and related overhead costs are as follows: initial concept formation $45,150; design $572,000; and construction oversight $123,050. The cost drivers and estimated use are as follows.
Activities | Cost Drivers | Estimated Use of Cost Drivers per Activity | ||
Initial concept formation | Number of project changes | 15 | ||
Design | Square feet | 143,000 | ||
Construction oversight | Number of months | 115 |
(a) Compute the predetermined overhead rate for each activity.
Overhead Rate | |||
Initial concept formation | $ | per project change | |
Design | $ | per square foot | |
Construction oversight | $ | Per month |
(b) Classify each of these activities as unit-level, batch-level, product-level, or facility-level.
Activities | Level | |
Initial concept formation | Unit-levelProduct-levelFacility-levelBatch-level | |
Design | Facility-levelUnit-levelProduct-levelBatch-level | |
Construction oversight | Batch-levelUnit-levelProduct-levelFacility-level |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started