M Inbox (89). b ?New tab P American Co. O gMAV? Infor M Inbox (89). b -Ch 17 Hom
ID: 2519776 • Letter: M
Question
M Inbox (89). b ?New tab P American Co. O gMAV? Infor M Inbox (89). b -Ch 17 Home B https// thtml Xie Company identified the following activities, costs, and activity drivers for 2017. The company Deluxe and Basic manufactures two types of go karts Expected Expected Activity Costs tivity Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory Designing packaging 100,000 parts $625,890 908,080 105,000 1,580 batches 700 orders 175,000 360,000 75,888 500 invoices 40,000 square feet 2 nodels company assigns overhead based on 125,000 budgeted direct labor required 6,000 direct labor hours Assign Required: 1. Compute a single plantwide overhead rate, assuming that the hours 2 in January 2017, the Deluxe model required 2.500 direct ibor hours and the basic model requred 6.00o adrect 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. Reqired 1 Required 2 In January 2017, the Dekuxe model required 2,500 direct labor hours and the basic model requiresd 6,000 direct labor hours Assign overhoad costs to each model using the single plantwide overthead rate. (Round "OH cost"answers to 2 decima Prev 1of6l Next > pe here to search ? F10
Explanation / Answer
1) Single Overhead Rate = Total Estimated Costs/Budgeted Direct Labor Hours
Total Estimated Costs = Handling Cost+Inspection Cost+Processing Cost+Paying Suppliers+Insurance+Design
= $625,000+$900,000+$105,000+$175,000+$300,000+$75,000
= $2,180,000
Single Overhead rate = $2,180,000/125,000 = $17.44 per direct labor hour
2) Allocation of cost to each model (Amounts in $)
Model Total DL hours Required (A) Plantwide OH Rate (B) Total Overhead Cost (A*B) Deluxe Model 2,500 hours $17.44 per hour 43,600 Basic Model 6,000 hours $17.44 per hour 104,640Related Questions
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