Company X has two products: A and B. Annual production and sales are 700 units of Product A and 800 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.2 direct labor hours per unit and Product B requires 0.6 direct labor hours per unit. The total estimated overhead for next period is $71,978. The company is considering switching to an activity-based costing system for computing unit product costs. The new activity-based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows: Expected Activity Activity Cost Pool (Activity Measure)Estimated Overhead CostsProduct AProduct B Total Activity 1 (Machine Hours) $/20,272 300 500 800 Activity 2 (Number of Parts) General Factory (Direct Labor Hours) 29,380 800 5001,300 21.634 140 480 620 Total. $/71,286 The Overall predetermined overhead rate ($) under the traditional costing system is closest to: (round figures to the nearest two decimal places) O a. 116.09 ОБ. 124.1 О с. 114.98 O d. 37.30 O e. None of the given answers
Company X has two products: A and B. Annual production and sales are 700 units of Product A and 800 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.2 direct labor hours per unit and Product B requires 0.6 direct labor hours per unit. The total estimated overhead for next period is $71,978. The company is considering switching to an activity-based costing system for computing unit product costs. The new activity-based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory--with estimated overhead costs and expected activity as follows: Expected Activity Activity Cost Pool (Activity Measure)Estimated Overhead CostsProduct AProduct B Total Activity 1 (Machine Hours) $/20,272 300 500 800 Activity 2 (Number of Parts) General Factory (Direct Labor Hours) 29,380 800 5001,300 21.634 140 480 620 Total. $/71,286 The Overall predetermined overhead rate ($) under the traditional costing system is closest to: (round figures to the nearest two decimal places) O a. 116.09 ОБ. 124.1 О с. 114.98 O d. 37.30 O e. None of the given answers
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 10E: SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that...
Related questions
Question
Fast solve plz
Transcribed Image Text:Company X has two products: A and B. Annual production and sales are 700 units of Product A and 800
units of Product B. The company has traditionally used direct labor-hours as the basis for applying all
manufacturing overhead to products. Product A requires 0.2 direct labor hours per unit and Product B
requires 0.6 direct labor hours per unit. The total estimated overhead for next period is $71,978.
The company is considering switching to an activity-based costing system for computing unit product costs.
The new activity-based costing system would have three overhead activity cost pools-Activity 1, Activity
2, and General Factory--with estimated overhead costs and expected activity as follows:
Expected Activity
Activity Cost Pool (Activity Measure)Estimated Overhead CostsProduct AProduct B Total
Activity 1 (Machine Hours)
$/20,272
300
500 800
Activity 2 (Number of Parts)
General Factory (Direct Labor Hours)
29,380
800
5001,300
140
480 620
21.634
$/71,286
Total.
The Overall predetermined overhead rate ($) under the traditional costing system is closest to: (round
figures to the nearest two decimal places)
O a. 116.09
ОБ. 124.1
О с. 114.98
O d. 37.30
O e. None of the given answers
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub