Question
ZIP Inc is a scooter manufacturer, using one (plant-wide) rate to allocate manufacturing overhead (MOH) to its products. However, starting in January 2023, ZIP decides
ZIP Inc is a scooter manufacturer, using one (plant-wide) rate to allocate manufacturing overhead (MOH) to its products. However, starting in January 2023, ZIP decides to switch to ABC costing to allocate the manufacturing overhead costs. The estimated manufacturing overhead costs for the upcoming year (2023), and the cost driver for each manufacturing activity, are shown in the table below. ACTIVITY Estimated MOH (Manufacturing Overhead) COST DRIVER Preparation $ 90,000 # preparation hours Machining $ 200,000 # machine hours Assembly $ 410,000 $ direct labour cost Total estimated activity for 2023: 1,200 preparation hours; 5,000 machine hours, and 4,500 direct labour hours. The rate of pay for all direct labour employees is $36 per hour.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started