Question
Tony's Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. Activity Cost Pool Cost Driver
Tony's Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year.
Activity Cost Pool | Cost Driver | Est. Overhead | Cost Driver Activity | |
Ordering and Receiving | Orders | $120,000 | 500 orders | |
Machine Setup | Setups | 297,000 | 450 setups | |
Machining | Machine hours | 1,500,000 | 125,000 MH | |
Assembly | Parts | 1,200,000 | 1,000,000 parts | |
Inspection | Inspections | 300,000 | 500 inspections |
If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is?
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Financial and Managerial Accounting
Authors: Horngren, Harrison, Oliver
3rd Edition
978-0132497992, 132913771, 132497972, 132497999, 9780132913775, 978-0132497978
