Question Three (a) The following activities are used in the manufacturing proces
ID: 2397345 • Letter: Q
Question
Question Three (a) The following activities are used in the manufacturing process of Sinatra Engineering Works. Cost Pools Acivity Costs Machine Setup Materials Handling Inspection Cost Drivers Driver Cons 150 se 120,000 pounds of materials 30,000 p sample size 100 u 40,000 number of setups 10,000 Required: The overhead rate for each activity above. he following activity usage were incurred in the production of Prodi Usage 10 setups 3,000 pounds 5 units Activity Machine setup Inspection Required: Total overhead costs for the production of Product Xing.Explanation / Answer
Cost Drivers Rate
Activity
Cost Drivers
Total Activity Amount (A)
Level of Activity (B)
Activity Rate (C=A/B)
Machine Setups
Setups
$ 40,000.00
150
$ 266.67
Per setup
Material Handling
Pounds Of Material
$ 120,000.00
30000
$ 4.00
Per Pound
Inspection
No of Units inspected
$ 10,000.00
100
$ 100.00
Per Inspection
$ 170,000.00
Product Xing Overhead per unit
Product Xing
Activity rate(A)
Activity Driver Incurred (B)
Overhead Assigned (C=A*B)
Machine Setups
$ 266.67
10
$ 2,666.67
Material Handling
$ 4.00
3000
$ 12,000.00
Inspection
$ 100.00
5
$ 500.00
Total Overheads
$ 15,166.67
Total Overhead cost for production of Product Xing is $ 15166.67.
Cost Drivers Rate
Activity
Cost Drivers
Total Activity Amount (A)
Level of Activity (B)
Activity Rate (C=A/B)
Machine Setups
Setups
$ 40,000.00
150
$ 266.67
Per setup
Material Handling
Pounds Of Material
$ 120,000.00
30000
$ 4.00
Per Pound
Inspection
No of Units inspected
$ 10,000.00
100
$ 100.00
Per Inspection
$ 170,000.00
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