Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $1200000; and assembling, $600000. Information on the two products is: Regular Supreme Direct labor hours 10000 15000 Machine hours 10000 30000 Number of parts 90000 160000 Overhead applied to Regular using traditional costing using direct labor hours is O $1410000. O $1080000. O $720000. O $390000.
Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $1200000; and assembling, $600000. Information on the two products is: Regular Supreme Direct labor hours 10000 15000 Machine hours 10000 30000 Number of parts 90000 160000 Overhead applied to Regular using traditional costing using direct labor hours is O $1410000. O $1080000. O $720000. O $390000.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 31E: Chester Company provided information on overhead for its three producing departments as follows:...
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Transcribed Image Text:Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $1200000;
and assembling, $600000. Information on the two products is:
Regular Supreme
Direct labor hours
10000
15000
Machine hours
10000
30000
Number of parts
90000
160000
Overhead applied to Regular using traditional costing using direct labor hours is
O $1410000.
O $1080000.
O $720000.
O $390000.
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Expert Solution
Step 1
First, compute the total estimated overhead as shown below:
Total estimated overhead = $1,200,000 + $600,000
Total estimated overhead = $1,800,000
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