Question
The following cost information is available for David, Ltd.: Activity Allocation Base Volume of Activity Overhead Cost Purchasing Purchase orders 25,000 $150,000 Receiving Shipments received
The following cost information is available for David, Ltd.:
Activity | Allocation Base | Volume of Activity | Overhead Cost |
Purchasing | Purchase orders | 25,000 | $150,000 |
Receiving | Shipments received | 17,000 | 68,000 |
Machine setups | Setups | 3,000 | 190,000 |
Quality control | Inspections | 20,000 | 100,000 |
Direct materials are $15 per unit for luxury handbags and $10 per unit for deluxe handbags. There were 12,000 direct labor hours. Each of which was charged to inventory at $18 per hour.
Required: Calculate the overhead rate using activity-based costing for the Purchasing Activity.
Required: Calculate the overhead rate using activity-based costing for the Receiving Activity.
Required: Calculate the overhead rate using activity-based costing for the Machine setups Activity.
Required: Calculate the overhead rate using activity-based costing for the Quality control Activity.
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