The Crouse Travel Company applies overhead to its international camping tours us

Question

The Crouse Travel Company applies overhead to its international camping tours using activity-based costing. Following is information about the three overhead cost pools:

6,000

*For any given tour, the number of tourist travel days is the number of tourists multiplied by the number of days in the tour. For example, 10 tourists on a seven-day tour would constitute 70 tourist travel days.

Required:

A) Calculate the overhead rates

B) Five of the 40 tours were 10-day trips to Patagonia. These tours averaaged 12 tourists per trip. How much overhead would be applied to these five Patagonia tours?

A detailed walkthrough on how to calculate overhead rates and find the objectives would be super helpful! We aren't able to use computer programs like Excel to solve for these problems so I'd appreciate a solution done traditionally. Thanks!

Total Costs Allocation Base Total Quantitiy of the Allocation Base Incurred Administration $200,000 Number of tours 40 Operations $600,000 Tourist travel days*

6,000

Marketing $180,000 Number of tourists 600

Explanation / Answer

Total Costs (40 Tours) Allocation Base Total Quantity of allocation base   (40 Tours) Overhead Rate ( Overhead cost/ allocation base Qty.) 5 Tours Costs (Overhead rate*Qty of allocation base) Administration $200,000 Number of tours 40 200000/40=5000 5000*5=25000 Operations $600,000 Tourist travel days 6,000 600000/6000=100 100*600=60000 Marketing $180,000 Number of tourists 600 180000/600=300 300*60=18000 Total $980,000 $           103,000 No. of tourist travel days in 5 Tours No. of Tours* No of days per tour* Tourist per trip 5*10*12=600 Number of Tourists No of tours* tourists per trip 5*12=60

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