ACCT 282 Quiz 4A F 17 NAME ___________________________________________________ V
ID: 2547813 • Letter: A
Question
ACCT 282
Quiz 4A
F 17 NAME ___________________________________________________
Vincent Jardine, a CPA, has a firm in the state of New York. Vincent uses ABC to allocate overhead costs and has computed the following predetermined overhead allocation rates:
Activity Allocation Base COST POOL Estimated Activity
Photocopy expenses Number of pages $4500 6000 pages
Cost of Maintenance Number of labor hours $2000 200 labor hours
What are the allocation rates based on ABC?
Photocopies _____________
Maintenance ______________
Vincent has important contacts in the northeastern parts of New York. During the past month, Vincent completed a job for Nurix Inc. The job required 135 labor hours and 4,000 photocopies. Determine the amount of indirect costs to be allocated to the job based on ABC.
Total cost _______________
If the traditional method was used based on direct labor hours, determine the amount of indirect cost allocated to the job.
OH Rate _______________
Total Cost _______________
Explanation / Answer
Req1 STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Activity Total Expected Activity ACTIVITY COST POOL Measures Overheads Activity Rate Photocopy expense pages 4,500 6,000 0.75 per page Cost of maintenance DLH 2,000 200 10.00 per DLH Photocopy expense 0.75 Cost of maintenance 10 Req 2: Indirect Cost allocated: Photocpy expense (4000 copies @0.75) 3000 Maintenance (135 DLH @10) 1350 Total indirect cost 4350 Req 3: OH rate based on DLH = Estimated OH / Estimated DLH = 6500 /200 = 32.5 per DLH Indirect cost assigned (135 DLH @32.50): $4,388
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