Question

Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go- karts: Deluxe and Basic. Activity Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory Designing packaging Expected Costs $635,000 910,000 115,000 185,000 310,000 85,000 Expected Activity 100,000 parts 1,500 batches 700 orders 500 invoices 40,000 square feet 2 models Required: 1. Compute a single plantwide overhead rate for the year, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours. 2. In January of this year, the Deluxe model required 2,500 direct labor hours and the basic model required 6,000 direct labor hours. Assign overhead costs to each model using the single plantwide overhead rate. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute a single plantwide overhead rate for the year, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours. 01 Required 1 Required 2 >

Answer 1

a) Single plantwide overhead rate

Estimated overhead	2240000	=	17.92	per DLH
Estimated labor hour	125000

b) Overhead applied

	Total DL hours required	Plantwide OH	Total overhead cost
Deluxe model	2500	17.92	44800
Basic model	6000	17.92	107520