Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

St. James, Inc., currently uses traditional costing procedures, applying $866,800 of overhead to products Beta and Zeta on the basis of direct labor hours. The

St. James, Inc., currently uses traditional costing procedures, applying $866,800 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow.

Product Pool No.1 (Driver: DLH) Pool No.2 (Driver: SU) Pool No.3 (Driver: PC)
Beta 1,500 45 2,450
Zeta 2,900 55 830
Pool Cost $176,000 $330,000 $360,800

The overhead cost allocated to Beta by using traditional costing procedures would be closest to:
$411,500.
$499,500.
$571,300.
some other amount.
$295,500.
The overhead cost allocated to Zeta by using traditional costing procedures would be closest to:
some other amount.
$571,300.
$295,500.
$499,500.
$411,500.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Implementing Change With Clinical Audit

Authors: Richard W. Baker, Hilary M. Hearnshaw, Noelle Robertson

1st Edition

0471982571, 978-0471982579

More Books

Students also viewed these Accounting questions

Question

What inventory cost flow does Apple use for its inventories?

Answered: 1 week ago