Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wrap Corporation is a job-order costing company that uses activity-based costing to apply overhead to jobs. The following overhead activities were budgeted for the year:

Wrap Corporation is a job-order costing company that uses activity-based costing to apply overhead to jobs. The following overhead activities were budgeted for the year:

Activity Cost Driver Amount of Driver
Setups $220,000 Number of setups 8,000
Purchasing 210,000 Number of parts 30,000
Other overhead 260,000 Direct labor hours 80,000

The following information about the jobs was given for August:

Job 201 Job 202 Job 203 Job 204
Balance 8/1 $64,500 $40,250 $31,400 $ 0
Direct materials $64,000 $32,300 $21,000 $16,000
Direct labor $82,000 $39,600 $45,000 $25,000
Number of setups 30 15 40 190
Number of parts 200 70 500 400
Direct labor hours 4,000 2,300 5,000 1,600

By August 31, Jobs 202 and 203 were completed and sold. The remaining jobs were still in process. What is the activity rate for purchasing?

a.$9

b.$5

c.$7

d.$6

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Ethics Education Making Ethics Real

Authors: Alberto J. Costa, Margarida M. Pinheiro

1st Edition

1032019999, 9781032019994

More Books

Students also viewed these Accounting questions