Question

Exercise 4-3 a1-a2, b1-b2 (Video) (Part Level Submission) EcoFabrics has budgeted overhead costs of $1,124,550. It has allocated overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 535,500 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $428,400 and $696,150 is allocated to the design cost pool. Additional information related to these pools is as follows. Wool Cotton Total Machine hours Number of setups 119,000 1,190 119,000 595 238,000 1,785 v (al) Your answer is correct. Calculate the overhead rate using activity based costing. (Round answers to 2 decimal places, e.g. 12.25.) Overhead rates for activity-based costing Cutting 1.80 per machine hour Design 390 per setup

Answer 1

solution :) DATE PAGE step-t. what is traditional approach for the Calculation of overhead mate? Traditional apbomacha por the calculation of overhead sate is also called traditional method In this approach approach we allocate the manufacturing Gues head costs to the products manufactured. Under this approach, manufacturing overhead cost or factory's indirect coot w allocated to the products manufactured on the basis of no. of produced, then direct labos houd of the Machine hoyas. units Step-& Caleulation of 앙 overhead rate usi using traditional approach Given, budgeted over head cost $ 1124550 Estimated Direct Labour houa 535500 formula for calculating overhead sate using toaditional approach Overhead date Budgeted overhead cost Estimated Direct labour houas 11245500 - $2.1 Per 585500 Direct labon houa