I am not sure where i went wrong on this one. Please show how you got the answer

Question

I am not sure where i went wrong on this one. Please show how you got the answer

Exercise 4-1 Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations. Standard Custom Direct labor costs Machine hours Setup hours 40,000 $110,000 1,460 370 1,450 103 Total estimated overhead costs are $295,000. Overhead cost allocated to the machining activity cost pool is $196,000, and $99,000 is allocated to the machine setup activity cost pool Your answer is incorrect. Try again. Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 12.25.) Predetermined overhead rate 196.701 % of direct labor cost

Explanation / Answer

Predetermined overhead rate = 295000/(40000+110000)= 196.67% of direct labor cost

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.