Question
ezto.mheducation.com/hm.tpx?_0.068513808 01005-150yg251 0 11 g eSearch Xie Company identifed the following activities, costs, and activity drivers for 2015. The company manufactures two types of go-karts: Deluxe and Basic. ted Activity Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory Designing packaging S 625,000 900,000 105,000 175,000 300,000 75,000 100,000 parts 1,500 batches 700 orders 500 invoices 40,000 square feet 2 models Required: 1. Compute a single plantwide overhead rate assuming that the company assigns overhead based on 125,000 budgeted direct labor hours. 2. In January 2015 the Deluxe model required 2,500 direct labor hours, and the Standard model required 6,000 direct labor hours Assign overhead costs to each model using the single plantwide overhead rat
Explanation / Answer
1. Compute single plantwide overhead rate :
Plantwide overhead rate = Estimated overhead/estimated labour hour
= 2180000/125000
Plantwide overhead rate = 17.44 per hour
2) Calculate assign overhead cost :
Total DL Hours required Plantwide OH Rate Total overhead cost Deluxe model 2500 17.44 43600 Basic Model 6000 17.44 104640
