OP Technologies Manufacturing manufactures small parts and uses an activityminus
ID: 2342285 • Letter: O
Question
OP Technologies Manufacturing manufactures small parts and uses an
activityminusbased
costing system.
Activity
Est. Indirect Activity
Costs
Allocation base
Cost allocation rate
Materials
$ 81 comma 000$81,000
Material moves
$ 2$2/move
Assembling
$ 252 comma 000$252,000
Direct labor hours
$ 8$8/dir.
Packaging
$ 110 comma 000$110,000
# of finished units
$ 1$1/finished
The following parts were produced in October with the following information:
Part
# Produced
Materials Costs
# Moves
Dir. Labor Hrs.
A
2 comma 1502,150
$ 3 comma 200$3,200
700700
250250
B
3 comma 0003,000
$ 5 comma 500$5,500
1 comma 6001,600
525525
C
4 comma 6504,650
$ 9 comma 000$9,000
2 comma 4002,400
1 comma 7001,700
Total manufacturing overhead costs for part A is
Activity
Est. Indirect Activity
Costs
Allocation base
Cost allocation rate
Materials
$ 81 comma 000$81,000
Material moves
$ 2$2/move
Assembling
$ 252 comma 000$252,000
Direct labor hours
$ 8$8/dir.
labor hourPackaging
$ 110 comma 000$110,000
# of finished units
$ 1$1/finished
unitExplanation / Answer
Computation of manufacturing overhead cost of part A
Manufacturing overhead cost = Materials Activity + Assembling Activity + Packaging Activity
Manufacturing overhead cost = 700 Moves * $2 + 250 Hours * $8 + 2150 * $1 per unit
Manufacturing overhead cost = 1400 + 2000 + 2150
Manufacturing overhead cost = $5550
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.