Brief Exercise 4-7 Spud, Inc. a manufacturer of gourmet potato chips, employs ac

Question

Brief Exercise 4-7 Spud, Inc. a manufacturer of gourmet potato chips, employs activity-based costing. The budgeted data for each of the activity cost pools is provided below for the year 2017. Estimated Overhead Expected Use of Cost Drivers per Activity Activity Cost Pools Ordering and receiving Food processing Packaging $80,886 12,200 orders 437,76057,000 machine hours 1,975,800 445,000 labor hours For 2017, the company had 11,900 orders and used 49,100 machine hours, and labor hours totaled 502,000. Calculate the overhead rates for each activity. (Round answers to 2 decimal places, e.g. 12.25.) Overhead Rates Ordering and receiving s Food processing Packaging per order per machine hour per labor hour LINK TO TEXT

Explanation / Answer

1) Calculation Overhead Rates :-

2) Calculation of Overhead Applied :-

Activity Calculation Cost per Activity Ordering and Receiving ($80886/12200) $6.63 per order Food Processing ($437760/57000) $7.68 per order Packaging ($1975800/445000) $4.44 per order

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