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Stanford Metal Works produces two types of metal lamps. Stanford manufactures 20,000 basic lamps and 3,300 designer lamps. Its activity-based costing system uses two
Stanford Metal Works produces two types of metal lamps. Stanford manufactures 20,000 basic lamps and 3,300 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost pool is for set up costs and the other for general manufacturing overhead. Stanford allocates set up costs to the two lamps based on setup labor-hours and general manufacturing overhead costs on the basis of direct manufacturing labor-hours. It provides the following budgeted cost information: (Click the icon to view the information.) Calculate the total budgeted costs of the basic and designer lamps using Stanford's activity-based costing system. Begin by calculating the overhead rates for each of the two indirect-cost pools; set up costs and general manufacturing overhead. First select the formula, then enter the applicable amounts and calculate the rate. Begin with the overhead rate for set up costs. (Abbreviations used: MOH Manufacturing Overhead.) Budgeted setup costs 70,400 Budgeted setup hours 320 Budgeted setup rate 220 per setup labor-hour
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