Current Attempt in ProgressKiner Co. computed an overhead rate for mnachining costs($680000) of $5 per machine hour. Machining costs aredriven by machine hours. If computed based on direct laborhours, the overhead rate for machining costs would be $10per direct labor hour. The company produces two products,Cape and Chap. Cape requires 81600 machine hours and20000 direct labor hours, while Chap requires 54400machine hours and 30000 direct labor hours. Usingactivity-based costing, machining costs assigned to eachproduct isChapСаре$408000$272000$750000$250000$200000$300000$371441$308559

Question
Asked Oct 13, 2019
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Current Attempt in Progress
Kiner Co. computed an overhead rate for mnachining costs
($680000) of $5 per machine hour. Machining costs are
driven by machine hours. If computed based on direct labor
hours, the overhead rate for machining costs would be $10
per direct labor hour. The company produces two products,
Cape and Chap. Cape requires 81600 machine hours and
20000 direct labor hours, while Chap requires 54400
machine hours and 30000 direct labor hours. Using
activity-based costing, machining costs assigned to each
product is
Chap
Саре
$408000
$272000
$750000
$250000
$200000
$300000
$371441
$308559
help_outline

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Current Attempt in Progress Kiner Co. computed an overhead rate for mnachining costs ($680000) of $5 per machine hour. Machining costs are driven by machine hours. If computed based on direct labor hours, the overhead rate for machining costs would be $10 per direct labor hour. The company produces two products, Cape and Chap. Cape requires 81600 machine hours and 20000 direct labor hours, while Chap requires 54400 machine hours and 30000 direct labor hours. Using activity-based costing, machining costs assigned to each product is Chap Саре $408000 $272000 $750000 $250000 $200000 $300000 $371441 $308559

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Expert Answer

Step 1

Compute machining cost assigned to Cape product using activity-based costing as shown below:

Cape machining cost Machine hours x Machine hour rate
81,600x S5
S408,000
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Cape machining cost Machine hours x Machine hour rate 81,600x S5 S408,000

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Step 2

Compute machining cost assigned to Chap product using act...

Chap machining cost Machine hours x Machine hour rate
54,400x $5
- $272,000
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Chap machining cost Machine hours x Machine hour rate 54,400x $5 - $272,000

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