#1. Problem B - How much of the $25,000 should be allocated to: (use commas, no

Question

#1. Problem B - How much of the $25,000 should be allocated to: (use commas, no decimals)

WIP   

FG   

COGS   

#2. Problem C, Part 1

Enter the activity rates (per activity measure) for:

Prepping   

Assembly   

Packaging   

Round to two decimals. Do not add a leading 0 if your answer is less than one. For example, if your answer is .75, enter as .75, not as 0.75

#3. Problem C, Part 2- How much MOH would be allocated to Gold Bands, per unit, under ABC? (Round to two decimals.)

#4. Problem C, Part 3- How much MOH would be allocated to Gold Bands per unit, under the traditional method? (Round to two decimals.)

Problem B Timbuktu Machinery had $25,000 of overapplied MOH at the end of the year. The balance was considered significant. Selected account balances at the end of the year: WIP FG COGS $ 149,360 373,400 $3,211,240

Explanation / Answer

Solution B:

Overapplied overhead = $25,000

Allocation to WIP = $149,360 / $3,734,000 * $25,000 = $1,000

Allocation to Finished Goods = $373,400 / $3,734,000 * $25,000 = $2,500

Allocation to Cost of Goods Sold = $3,211,240 / $3,734,000 * $25,000 = $21,500

Solution C - 1:

Solution C - 2:

Solution C - 3:

Predetermined overhead rate on the basis of machine hours = $1,017,831 / 15250 = $66.743 per machine hour

MOH would be allocated to Gold Bands = $1,017,831 * 1500 / 15250 = $100,114.52

MOH would be allocated to gold bands per unit = $100,114.52 / 50000 = $2.00 per unit

Computation of Activity Rate Activity Activity Cost Activity Measure Total Activity Acitivity Rate (Acitivity Cost / Total Activity) Prepping $394,200.00 DLH 14600 $27.00 Assembly $526,125.00 MH 15250 $34.50 Packaging $97,506.00 Cu. Feet 406275 $.24

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