Exercise 17-1 (Part Level Submission) Saddle Inc. has two types of handbags: sta

Question

Exercise 17-1 (Part Level Submission) Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations. Direct labor costs Machine hours Setup hours $47,000 99,000 1,440 430 1,440 103 Total estimated overhead costs are $298,000. Overhead cost allocated to the machining activity cost pool is $197,000, and $101,000 is allocated to the machine setup activity cost pool Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 12.25.) Predetermined overhead rate % of direct labor cost LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR EXERCISE Attempts: 0 of 5 usedSAVE FOR LATER SUBMIT ANSWER

Explanation / Answer

Saddle Inc. Predetermined Overhead rate=(Overhead/Labor cost)*100 Overhaead= $                  298,000.00 Direct Labor Cost=($47000+$99000) $                  146,000.00 Predermined Overhead rate= 204% of Direct Labor Cost Ayala Inc. Products Sales Price=(A) Traditonal Cost=(B) Operating Income=(A)-(B) Product 540X $                  212,000.00 $            58,000.00 $                 154,000.00 Product 137Y $                  165,000.00 $            50,000.00 $                 115,000.00 Product 249S $                   82,000.00 $            20,000.00 $                   62,000.00 EcoFabrics Given Activity Cost Pool Cost Drivers Estimated Overhead Cutting Machine Hours $           428,400.00 Design Number of Set Up $           696,150.00 Overhead Rates using activity based costing approach Activity based overhead rate Cutting (Estimated Overhead Machining/(Wool Machine Hours +Cotton Machine Hours ) $428400/(119000+119000) Per Machine Hours $                           1.80 Per Machine Hours Design (Estimated Overhead Design/(Wool Number of setup+Cotton Number of setup) Activity based overhead rate $696150/(1190+595) Per Setup $                        390.00 Per Setup

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.