A company has identified the following overhead.costs and cost drivers for the c

Question

A company has identified the following overhead.costs and cost drivers for the coming year: item Cost driver Budgeted costs $ Budgeted activity level Machine setup Inspection Material handling Engineering Total 20,000 130,000 80,000 50,000 280,000 200 1C 6,500 8,000 1,000 # of setups # of inspections #of material moves Engineering hours The following information was collected on three jobs that were completed during the year: ob 103 8,000 4,000 200 4 30 50 10 Job 101 5,000 2,000 100 Job 102 12,000 2,000 50 Direct materials Direct labor Units completed # of setups # of inspections # of material moves Engineering hours 20 30 10 10 10 50 Answer the following questions: What is the overhead allocation rate for Machine setup activity? 1 point 1. 1 Point 2. What is the overhead allocation rate for inspection activity? 3. What is the overhead allocation rate for material moves? 1 point 1 point 4. What is the overhead allocation rate for engineering activity?

Explanation / Answer

Answer

1

100.00

2

20.00

3

10.00

4

50.00

5

320.00

6

98.00

7

$1300

Budgeted Cost Budgeted Activity Level Ovehead Allocation Rate Machine Setups 20000 200                                       100.00 Inspection 130000 6500                                          20.00 Material Handeling 80000 8000                                          10.00 Engineering 50000 1000                                          50.00

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