Wafer A 0.70 0.20 0.25 0.60 Wafee 0.30 0.80 0.75 0.40 Quantity Activity 7. Inserting dies 8. Purchasing materials Driver Number of dies Number of purchase 2,000,000 2.500 orders 10,000 1. Developing test programs Engineering hours 3. Testing products Test hours S1,500,000 1,500,000 ABC assignment Total overhead cost Required: I. Form reduced system cost pools for activities 7 and s. 2. Assign the costs of the reduced system cost pools to Wafer A and Wafer B What ifthe two activities were I and 3? Repeat Requirements I and 2. What does this EXERCISES Exercise 4,11 BJECTIVE O Predetermined Overhead Rate, Applied Overhead, Unit Cost Ripley. Inc., costs products using a normal costing system. The following data are available last year Budgeted: Overhead Machine hours Direct labor hours $285,600 84,000 10,200 Overhead Machine hours Direct labor hours Prime cost Number of units $285,000 82,200 9,930 $1,050,000 150,000 Overhead is applied on the basis of direct labor hours. Required: 1. What was the predetermined overhead rate? 2. What was the applied overhead for last year? 3. Was overhead over- or underapplied, and by how much? 4. What was the total cost per unit produced (carry your answer to four significant digits)? ECTIVE 1 Exercise 4.12 Predetermined Overhead Rate, Application of Overhead Findley Company and Lemon Company both use predetermined overhead rates to apply mant facturing overhead to production. Findley's is based on machine hours, and Lemon's is based on materials cost. Budgeted production and cost data for Findley and Lemon are as follows: Findley $912,000 Lemon Manufacturing overhead Units Machine hours Materials cost $990,000 60,000 33,750 S450,000 1,800,000 20,000 48,000