Sleep Tight Company manufactures pillows using an activity-based costing system to allocate all manufacturing conversion costs....
Sleep Tight Company manufactures pillows using an activity-based costing system to allocate all manufacturing conversion costs. The company has identified "assembling" activity to which it has allocated estimated overhead of $13,860. It has determined the estimated use of cost drivers for that activity to be 4,200 parts. Each pillow consists of 4 parts. What is the cost of ‘assembling’ activity for each pillow?
Homework Answers
Answer: $53.20
Calculations:
Allocation rate = Estimated overhead cost ÷ Estimated cost driver
= $13,860 ÷ 4,200 parts
= $3.30 per part
.
*Cost of 'Assembling' activity for each pillow = 4 parts x $13.30
= $53.20
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Sleep Tight Company manufactures pillows using an activity-based
costing system to allocate all manufacturing conversion costs....
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