Zester, Inc. uses activity-based costing to account for its carbon fiber wheels manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for 2021 and their allocation bases are as follows: Activity Total Budgeted Cost Materials Handling $6,300 Machine Setup $2.900 Insertion of Parts $49,500 Finishing $79,700 Total $ 138,400 Allocation Base Number of parts Number of setups Number of parts Finishing direct labor hours Zester, Inc, expects a total of 470 wheel sets during the year. The wheel sets are expected to use 4,030 parts, require 9 setups and consume 970 hours of finishing time. (Round your answers to two decimal places when needed and use rounded answers for all future calculations) 1. Compute the predetermined overhead allocation rate for each activity. Activity Total estimated overhead cost 1 Total estimated quantity of the overhead allocation base Predetermined Overhead Allocation Rate H1 = Materials Handling Machine Setup Insertion of Parts Finishing 10 = 2. Compute the expected indirect manufacturing cost of each wheel set. Materials Handling Predetermined Overhead Allocation rate Actual Quantity X of the Allocation Base Used Allocated Manufacturing Overhead Cost X II 11 X Materials Handling Machine Setup Insertion of Parts Finishing X 11 Total Manufacturing Overhead Costs Number of Wheel Sets Manufacturing overhead cost per wheel set Zester, Inc. uses activity-based costing to account for its carbon fiber wheels manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for 2021 and their allocation bases are as follows: Activity Total Budgeted Cost Materials Handling $6,300 Machine Setup $2.900 Insertion of Parts $49,500 Finishing $79,700 Total $ 138,400 Allocation Base Number of parts Number of setups Number of parts Finishing direct labor hours Zester, Inc, expects a total of 470 wheel sets during the year. The wheel sets are expected to use 4,030 parts, require 9 setups and consume 970 hours of finishing time. (Round your answers to two decimal places when needed and use rounded answers for all future calculations) 1. Compute the predetermined overhead allocation rate for each activity. Activity Total estimated overhead cost 1 Total estimated quantity of the overhead allocation base Predetermined Overhead Allocation Rate H1 = Materials Handling Machine Setup Insertion of Parts Finishing 10 = 2. Compute the expected indirect manufacturing cost of each wheel set. Materials Handling Predetermined Overhead Allocation rate Actual Quantity X of the Allocation Base Used Allocated Manufacturing Overhead Cost X II 11 X Materials Handling Machine Setup Insertion of Parts Finishing X 11 Total Manufacturing Overhead Costs Number of Wheel Sets Manufacturing overhead cost per wheel set
