Knowledge Check 01
Expected Activity | |||||||||
Activities and Activity Measures |
Estimated Overhead Costs | Product 1 | Product 2 | ||||||
Hand-processing (direct labor-hours) | $ | 320,000 | 45,000 | 55,000 | |||||
Setting up equipment (number of setups) | 150,000 | 9,000 | 21,000 | ||||||
Administering parts inventories (number of part types) | 30,000 | 110 | 90 | ||||||
$ | 500,000 | ||||||||
Transformation Corporation has provided the information set forth above regarding the overhead to be allocated between the two products it produces: CDE and EFG. What is the activity rate for the hand-processing units activity?
Activity rate for hand processing = estimated overhead / total labour hours
Total labour hours = 45000+55000= 100000
Thus, activity rate for hand processing = 320000/100000
Activity rate = $3.20 per labour hour.
Knowledge Check 01 Expected Activity Activities and Activity Measures Estimated Overhead Costs Product 1 Product 2...
Knowledge Check 01 Helio Company has two products: A and B. The annual production and sales of Product A is 1,850 units and of Product B is 1,250 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor-hours per unit and Product B requires 0.6 direct labor-hours per unit. The total estimated overhead for next period is $100,485. What is the company's predetermined overhead rate? Answer...
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Problem 4-17 Contrast Activity-Based Costing and Conventional Product Costing (LO4-2, L04-3, L04-4) [The following information applies to the questions displayed below.) Puget World, Inc., manufactures two models of television sets, the N 800 XL model and the N 500 model. Data regarding the two products follow: Model N 800 XL Model N 500 Direct Labor- Total Direct Hours per Unit Annual Production Labor-Hours 3,000 units 9.000 12,000 units 12,000 21,000 Additional information about the company follows: a. Model N 800...
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