Try It! Newton Company has analyzed its production process and identified two pr

Question

Try It! Newton Company has analyzed its production process and identified two primary activities. These activities, their allocation bases, and their estimated costs are listed below Activity Estimated Activity Estimated Costs 10,000 S 7,500 Allocation Base Purchasing Materials handling Number of purchase orders Number of parts 200 purchase orders 15,000 parts The company manufactures two products: Regular and Super. The products use the following resources in March: Regular 5 purchase orders Super 7 purchase orders Number of purchase orders Number of parts 600 parts 750 parts 5. Compute the predetermined overhead allocation rates using activity-based c 6. Determine the amount of overhead allocated to Regular products in March. 7. Determine the amount of overhead allocated to Super products in March. osting Check your answers online in MyAccountingLab or at http://www.pearsonhighered.com/Horngren. For more practice, see Short Exercises S19-3 through S19-8. MyAccountingLab

Explanation / Answer

5) overhead allocation rates overhead rate purchasing 10,000/200 50 per purchase order Materials handling 7500/15000 0.5 per part 6) overhead allocated to regular part oh rate Activity allocated overhead (a) (b) c=a*b purchasing 50 5 250 Materials handling 0.5 600 300 overhead allocated to regular part 550 answer 7) overhead allocated to super part oh rate Activity allocated overhead (a) (b) c=a*b purchasing 50 7 350 Materials handling 0.5 750 375 overhead allocated to regular part 725 answer

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