Naler Company has analyzed its production process and identified two primary act

Question

Naler Company has analyzed its production process and identified two primary activities. These activities, their allocation bases, and their estimated costs are listed below (Click on the icon to view the estimated costs data.) The company manufactures two products: Regular and Super. The products use the following resources 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 activity-based costing. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest cent.) Predetermined OH allocation rate Data Table Purchasing Material handling Requirements 6 and 7. Determine the amount of overhead allocated to Regular products and Super products in March. Begin by selecting the formula to allocate overhead costs. Allocation Base Estimated Costs Estimated 220 purchase orders 14,000 parts Number of purchase orders 10,560 6,300 Materials handling Number of parts Allocated mfg. overhead costs Print Done Compute the amount of overhead allocated to Regular, then compute the amount of overhead allocated to Super. Regular Super Purchasing Materials Handling Allocated mfg. overhead costs Data Table Super Number of purchase orders Number of parts 5 purchase orders 900 parts 9 purchase orders 1,100 parts Print Done

Explanation / Answer

Estimated Costs / Estimated Activity = Predetermined OH allocation rate Purchasing $10,560 / 220 = $48 Material Handling $6,300 / 14,000 = $0.45 Predetermined OH allocation rate × Total Activity = Allocated mfg. overhead costs Regular Super Purchasing $240 $432 Materials Handling 405 495 Allocated mfg. overhead costs $645 $927

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