Chan Company identified the following activities, costs, and activity drivers fo
ID: 2408647 • Letter: C
Question
Chan Company identified the following activities, costs, and activity drivers for 2017. The company manufactures two types of go-karts fast and standard. Activity Expected Costs Expected Activity $625,000100,000 parts Handling materials Inspecting produet Processing purchase orders Paying suppliers Insuring the factory Designing packaging 900,000 105,000 175,000 0,000 5,000 1,500 batches 700 orders 500 invoices 40,000 square feet 2 models 30 based on 100,000 budgeted direct labor 1. Compute a single plantwide overhead rate assuming that the company assigns overhead hours. 2. In January 2017 the fast model required 2,500 direct labor hours and the standard model required 6,000 direct labor hours. Assign overhead costs to each model using the single plantwide overhead rate Complete this question by entering your answers in the tabs below Required 1Required 2 Compute a single plantwide overhead rate assuming that the company assigns overhead based on 100,000 budgeted direct labor hours Required 2>Explanation / Answer
Given, overhead activities
costs($)
Handling materials
625000
inspecting product
900000
processing purchase orders
105000
paying supplies
175000
insuring the factory
300000
designing packaging
75000
Total overhead costs
2,180,000.00
1 ans
Under single plant wide overhead rate
A
Given, budgeted direct labour hours
100,000.00
B
Total overhead costs
2,180,000.00
Overhead rate per hour=B/A
21.8
2 Ans
given, Direct labour hours
fast model
2500
standard model
6000
A
Total direct labour hours
8500
B
Total overhead costs
2,180,000.00
Overhead rate per hour=B/A
256.47
Total Direct labour hours required
Plantwide OH rate
Total overhead cost
FAST Model
2500
256.47
641175
standard model
6000
256.47
1538820
Total
2179995
Given, overhead activities
costs($)
Handling materials
625000
inspecting product
900000
processing purchase orders
105000
paying supplies
175000
insuring the factory
300000
designing packaging
75000
Total overhead costs
2,180,000.00
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