Cross Roads Manufacturing currently uses a traditional costing system. The company allocates overhead to its two products, Zips and Dees, using a predetermined manufacturing overhead rate based on direct labor hours. Here is data related to the company's two products: Zips Dees Direct materials per unit Direct labor per unit $148 $120 $54 $49 Direct labor hours per unit 2.5 1 Annual production 23,500 39,000 Information about the company's estimated manufacturing overhead for the year follows: Estimated Activities Activity measures Direct labor hours overhead cost $3,214,250 $199,000 Supervision and maintenance Number of batches Batch costs O A. $92.52 O B. $58.43 O C. $35.21 D. $21.97 Direct labor hours $3,214,250 Supervision and maintenance Batch costs $199,000 Number of batches Number of engineering hours $194,950 Engineering changes $3,608,200 Total estimated manufacturing overhead for the year Total estimated direct labor hours for the company for the year are 97,750 hours. The company is evaluating whether it should use an activity - based costing system in place of its traditional costing system. Additional information about production needed for the activity based costing system follows Zips 58,750 Dees Total Direct labor hours 39,000 97,750 Batches 2,350 300 2,650 Engineering hours 2,050 1,100 3,150 The amount of manufacturing overhead that would be allocated to one unit of Dees using an activity based costing system would be closeest to (Do not round intermediate calculations and round the final answer to the nearest cent.) O A. $92.52 O B. $58.43 O C. $35.21 D. $21.97
Cross Roads Manufacturing currently uses a traditional costing system. The company allocates overhead to its two products, Zips and Dees, using a predetermined manufacturing overhead rate based on direct labor hours. Here is data related to the company's two products: Zips Dees Direct materials per unit Direct labor per unit $148 $120 $54 $49 Direct labor hours per unit 2.5 1 Annual production 23,500 39,000 Information about the company's estimated manufacturing overhead for the year follows: Estimated Activities Activity measures Direct labor hours overhead cost $3,214,250 $199,000 Supervision and maintenance Number of batches Batch costs O A. $92.52 O B. $58.43 O C. $35.21 D. $21.97 Direct labor hours $3,214,250 Supervision and maintenance Batch costs $199,000 Number of batches Number of engineering hours $194,950 Engineering changes $3,608,200 Total estimated manufacturing overhead for the year Total estimated direct labor hours for the company for the year are 97,750 hours. The company is evaluating whether it should use an activity - based costing system in place of its traditional costing system. Additional information about production needed for the activity based costing system follows Zips 58,750 Dees Total Direct labor hours 39,000 97,750 Batches 2,350 300 2,650 Engineering hours 2,050 1,100 3,150 The amount of manufacturing overhead that would be allocated to one unit of Dees using an activity based costing system would be closeest to (Do not round intermediate calculations and round the final answer to the nearest cent.) O A. $92.52 O B. $58.43 O C. $35.21 D. $21.97
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 2PB: Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500...
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