Question
The Crouse Travel Company applies overhead to its international camping tours using activity-based costing. Following is information about the three overhead cost pools: Total Costs
The Crouse Travel Company applies overhead to its international camping tours using activity-based costing. Following is information about the three overhead cost pools:
Total Costs | Allocation Base | Total Quantitiy of the Allocation Base Incurred | |
Administration | $200,000 | Number of tours | 40 |
Operations | $600,000 | Tourist travel days* | 6,000 |
Marketing | $180,000 | Number of tourists | 600 |
*For any given tour, the number of tourist travel days is the number of tourists multiplied by the number of days in the tour. For example, 10 tourists on a seven-day tour would constitute 70 tourist travel days.
Required:
A) Calculate the overhead rates
B) Five of the 40 tours were 10-day trips to Patagonia. These tours averaaged 12 tourists per trip. How much overhead would be applied to these five Patagonia tours?
A detailed walkthrough on how to calculate overhead rates and find the objectives would be super helpful! We aren't able to use computer programs like Excel to solve for these problems so I'd appreciate a solution done traditionally. Thanks!
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