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ID: 2402115 • Letter: H
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home / study / business / accounting / accounting questions and answers / jackson enterprises manufactures two products - a basic gizmo and an advanced model gizmo. ... Question: Jackson Enterprises manufactures two products - a basic gizmo and an advanced model gizmo. The co... Jackson Enterprises manufactures two products - a basic gizmo and an advanced model gizmo. The company is using an activity-based costing system. They have identified three activities for allocation of indirect costs. Activity Cost Driver Cost-Allocation rate Materials receiving Number of parts $2.00 per part Production setup Number of setups $500.00 per setup Quality inspection Inspection time $90 per hour A production run for the basic model is 250 units, for the advanced model, 100 units. Each unit of product consumes the following activities: Number of parts Number of setups Inspection Time Basic Gizmo 10 1 10 minutes Advanced Gizmo 15 1 20 minutes Direct costs for the two products are as follows: Direct Materials Direct Labor Basic Gizmo $50.00 $75.00 Advanced Gizmo $95.00 $125.00
THe amount of overhead allocated to one unit of the basic model would be
Explanation / Answer
Calculate amount of overhead allocated to one unit ;
Material received (2*10) 20 Setup cost 500 Quality inspectioon (90*10/60) 15 Total overhead cost 535 Units 250 Amount of overhead allocted to one unit 2.14Related Questions
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