Exercise 7-14 (Part Level Submission) (a) Exercise 7-14 (Part Level Submission)

Question

Exercise 7-14 (Part Level Submission)

(a)

Exercise 7-14 (Part Level Submission)

Jay Krue makes two products, Simple and Complex. As their names suggest, Simple is the more basic product, and Complex comes with all the bells and whistles. The company has always allocated overhead costs to products based on machine hours. Last year, the company implemented an activity-based costing system, and managers determined the following activity pools and rates based on total overhead of $1,547,000:
Rate Assembly $1.25 per direct labor hour Fabrication $9.75 per machine hour Setups $18 per batch Bonding $180,150 direct to Complex
Only the Complex product requires bonding, so all the costs of bonding should be allocated to Complex. The following data relate to both products.
Simple Complex Units produced 127,000 50,000 Direct labor hours 232,000 102,000 Machine hours 55,000 30,000 Batches 2,100 4,600

Explanation / Answer

Ans;

Total Overhead 1635100 less Cost direct to Complex 279150 Overhead Cost Apportioned 1355950 Machine Hour 83000 overhead Rate per MH 1429000/41000 16.34

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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