Question

oinpany has two production departments. A and B At the start of 2018, the following budgeted able: he start of 2018, the following budgeted cost information Overhead Department A $260,000 Department B $210,000 ving activity information is for X Company's only two jobs, I during the year: is for X Company's only two jobs. Job 11 and Job 22, both of which were started and Job 11 Job 22 Direct labor hours in Department A 1,646 660 Direct labor hours in Department B 1,390 Machine hours in Department A 2,160 2,580 Machine hours in Department B 1,600 1,580 410 artmental allocation system with machine hours as the cost driver in Department A and direct labor hours. river in Department B, what was the allocation to Job 11 (round overhead rate(s) to two decimal places? $88,752 BO $103,840 CO $121,492 DO $142,146 EO $166,311 FO $194,584 Company uses an activity-based costing overhead allocation system. It has identified three activities - S 8, Packaging - and their respective cost drivers - setup hours, purchase orders, packages. Budgeted activity ere as follows: Activity Budgeted Cost Setup $109,500 Purchasing 50,500 Packaging 55,000 ing 2018 cost driver information is available for one of its products, Product A, and for all of its products (i Product A All Products setup hours 28,300 842,308 purchase orders 52,400 1,010,000 packages 75,200 785,714 overhead was allocated to Product A in 2018 (round overhead rate(s) to two decimal places)? 2,779 BO $3,695 CO $4,915 DO 56,537 EO $8,694 FO $11,563

Answer 1

Answerd liven Department A Department B has has machine Labour Hour Hour as as lost Driver- cost priveo to calculate Total Machine Hour for Hence, we need Department A Total Labour and , Hour for Pepartment B Total Machine Hour for Department As Machine Hour for Job ll & machiner Hour Job 12 2160 + 2580 Hours 47 40 Madluke Hours Total Labour Hour for Department B = of Labour Hour for pob 11 Labour Hour for Tobia 2 410 + 1390 = 1800 Hours. overhead Rate -> Department A= overhecel - $260000 Total Machine Hour 4740 & $54.85 (Machine Hour. Department Br overhead & Overhead Total Maakoour Hour Total Labour Hour >$) 10000_-) $16067 2- 1800 Aldocation to Job 11 z machine Hour & overdeal late of Departments . Add: labour & overhead Rate of Dept. B = 2160 x 4.85 + 410 x 116.67 - $166311 option (E]

Answer 2 Activity based Allocation Overheal Pate of Setup = Rotal setup lost - $ 109560 Total setup Hours 842308' $0.13 of Hour purchasiep order overhead Rate Total Purchase cost Totul purchase order » $50500 0.05 / order.. 1010060 Packaginy overhead late 2 $55000 2 0.07 / Packaging 785 714 Hence & Totel Cost Allocated to product a Setup lout - 28300x 0.13 = $3679 purchassy order cost - $2400 'X 0.05 = 82620 Packaging cost - 7520 x 0.07 285264 811563 Heuce option (F) 11 563 is correet,