Question

Xie Company identified the following activities, costs, and activity drivers for 2017 The company manufactures two types of go-karts: Deluxe and Basic. Activity Hand1ing mata iala Inapacting product 5625,000 100,000 pasta 1,500 batehaa Paying auppl10a Inausing tha factory 0,000 aat 2 modala 75, 000 Required: 1. Compute single plantwide overhead rate, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours. 2 In Janusry 2017, the Deluxe model required 2500 direct labor hours and the basic model required 6,000 direct labor hours. Assign overhead costs to each model using the single plantwide overhesd rate. Complete this question by entering your answers in the tabs below. Required Required2 Compute 톱 single plantwide overhead rate, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours Required 2>

Answer 1

1. Single plantwide overhead rate = Expected costs/Budgeted direct labor hours = $2180000/125000 = $17.44 per direct labor hour

2.

	Total DL Hours required	Plantwide OH Rate	Total Overhead Cost
Deluxe model	2500	$                         17.44	$                   43,600.00
Basic model	6000	$                         17.44	$ 104,640.00

Activity	Expected Costs	Expected Activity		Activity Rate
Handling materials	$ 625,000	100000	parts	$              6.25	per part
Inspecting product	$ 900,000	1500	batches	$         600.00	per batch
Processing orders	$ 105,000	700	orders	$         150.00	per order
Paying supplies	$ 175,000	500	invoices	$         350.00	per invoice
Insuring factory	$ 300,000	40000	square feet	$              7.50	per square foot
Designing packaging	$                                75,000	2	models	$   37,500.00	per model
Deluxe
Activity	Activity Rate		Cost driver quantity incurred		OH Allocated
Handling materials	$                                     6.25	per part	20000	parts	$ 125,000
Inspecting product	$                                600.00	per batch	250	batches	$ 150,000
Processing orders	$                                150.00	per order	50	orders	$                 7,500
Paying supplies	$                                350.00	per invoice	50	invoices	$               17,500
Insuring factory	$                                     7.50	per square foot	10000	sq. ft.	$               75,000
Designing packaging	$                          37,500.00	per model	1	model	$               37,500
Total overhead cost allocated					$ 412,500
Number of units produced					10000
Overhead cost per unit					$                 41.25
Basic
Activity	Activity Rate		Cost driver quantity incurred		OH Allocated
Handling materials	$                                     6.25	per part	30000	parts	$ 187,500
Inspecting product	$                                600.00	per batch	100	batches	$               60,000
Processing orders	$                                150.00	per order	20	orders	$                 3,000
Paying supplies	$                                350.00	per invoice	10	invoices	$                 3,500
Insuring factory	$                                     7.50	per square foot	7000	sq. ft.	$               52,500
Designing packaging	$                          37,500.00	per model	1	model	$               37,500
Total overhead cost allocated					$ 344,000
Number of units produced					30000
Overhead cost per unit					$                 11.47