?????406 Spring Summer 2 rt Page Layout Formulas Data Review Cut Arial 11 A-A Ed

Question

?????406 Spring Summer 2 rt Page Layout Formulas Data Review Cut Arial 11 A-A Ed Wrap Text Copy" ??? 6 marks Awrays start your answer in column 8..COLUMN A IS FOR INSTRUCTOR USE ONLY You may use space below the question to show calculations Plaase put correct answer in the underlined space provided. ABC Company produces two types of parts, 1 and 2. Information pertaining to these two parts is as follows Part 1 Part 2 150.00 60.00 30 00 9.00 6.00 24.00 75.00 90.00 45.00 9.00 3.00 36.00 Units completed Direct labor hours Grinding hours Number of setups Inspection hours Number of orders received Prime costs S 217,500 $ 232,500 Additionally, the following overhead costs are reported for the activities associated with he two parts Setting up Inspecting Grinding Receiving 90,000 67,500 135,000 37,500 Required Compute the total overhead assigned to each part using activity- based costing method appropriate for the information provided a) (6 Marks) Total overhead Part 1 Total overhead Part 2 Marks 01 03 05 06 07 MacBa

Explanation / Answer

Computation of total Overhead assigned to each part using ABC Activities Cost Driver Activity Pool (1) Cost Pool (2) Overhead Rate 3=2/1 No. of Activity Part-1   (4) OverheadCost Allocated to Part-1 (3X4) No. of Activity Part-2 (5) Overhead Cost Allocated to Part-2 (3X5) Setting Up No. of Setup 18 $90,000 $5,000 9 $45,000 9 $45,000 inspectin g Inspection hour 9 $67,500 $7,500 6 $45,000 3 $22,500 Grinding Grinding Hour 75 $135,000 $1,800 30 $54,000 45 $81,000 Receiving No. of Order Received 60 $37,500 $625 24 $15,000 36 $22,500 Total Overhead $330,000 $159,000 $171,000

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