Needam Company has analyzed its production process and identified two primary ac

Question

Needam Company has analyzed its production process and identified two primary activities. These activites, their alocation bases, and their estimated costs are listed below. (Click on the icon to view the estimated costs data.) The company manufactures two products: Ragular and Supor. The praducts use the following rosourcos in March: (Click on the icon to view the actual data for March.) Read the requirements. Requirement 5. Compute the predetermined overhead allocation rates using actvity-based costing. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the alocation rate for each activ Data Table Estimated qty of the allocation base 250 16000 Estimatod ovorhead costs -allocation rato 16500 Purchasing Material handling Roquiroments 6 and 7. Detornine tho amount of ovorhoad allocated to Rogular products and Super products in March. Begin by selecting the formula to allocate overhead costs. 0.57 Regular Super Number of purchase orders Number of parts purchase orders 10 purchase orders 600 parts 800 parts Allocated mfg Print Done Actual qty of the alocation baso used | x Predetermined OH allocation rato overhead oosts Compute the amount of overhead alocated to Regular, then compute the amount of overhead allocated to Super Regular Super Data Table Purchasing Materials Handling Allocated mfg overhead costs Activity Allocation Base Estimated Activity Estimated Costs Number of purchase orders 250 purchase orders 16,000 parts Purchasing 16,500 Materials handing Number of parts 9,120 PrintDone Choose from any list or enter any number in the input fields and then continue to the next question.

Explanation / Answer

Compute perdetermine overhead rate :

Formula :

Compute the amount of overhead allocated :

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Estimated overhead costs / estimated activity = predetermine OH allocation rate Purchasing 16500 / 250 = 66 per order material handling 9120 / 16000 = 0.57 per parts

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