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or the possible switch, Julio has identified two cost pools: materials handling

ID: 2330286 • Letter: O

Question

or the possible switch, Julio has identified two cost pools: materials handling and setup. The collected data follow 26,700 935 585 Total estimated overhead costs are $379,700, of which $172,700 is assigned to the material handling cost pool and $207,000 is assigned to the setup cost pool 1. Calculate the overhead assigned to each product using the traditional cost system. (Round the overhead rate to four decimal places.) 2. Calculate the overhead assigned to each product using ABC. bo Hints References eBook & Resources 0 Type here to search

Explanation / Answer

Working for overhead recovery rates:

1

2

Cost pool Amount Driver Rate Material handling        172,700           1,570 110 Per material move Set up cost        207,000              690 300 per setup Total estimated overhead        379,700        58,400 6.50 Per machiner hour