In manufacturing footballs, Spector Company's plant used 360 direct labor hours, 450 machine hours, and 23 setups. The following overhead costs were taken from the factory accounts: Overhead expenses: $175,000 66,000 $241,000 Machining Center Setup Center Total Volume of activities: 25,000 machine hours 100 setups 5,000 direct labor hours The plant was using a factory-wide overhead rate based on direct labor hours. A new ABC system will use machine hours in the Machining Center and number of setups in the Setup Center as cost drivers. By what amount would the amount of overhead costs assigned to footballs differ between the prior system and the ABC system? $_

In manufacturing footballs, Spector Company's plant used 360 direct labor hours, 450 machine hours, and 23 setups. The following overhead costs were taken from the factory accounts: Overhead expenses: $175,000 66,000 $241,000 Machining Center Setup Center Total Volume of activities: 25,000 machine hours 100 setups 5,000 direct labor hours The plant was using a factory-wide overhead rate based on direct labor hours. A new ABC system will use machine hours in the Machining Center and number of setups in the Setup Center as cost drivers. By what amount would the amount of overhead costs assigned to footballs differ between the prior system and the ABC system? $_

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Description: In manufacturing footballs, Spector Company's plant used 360 direct labor hours, 450 machine hours, and23 setups. The following overhead costs were taken from the factory accounts:Machining CenterSetup CenterTotalOverhead expenses:$175,00066,000$241

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1MC: Active Frame, Inc., manufactures clear and tinted sport glasses. The manufacturing of clear glasses...

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Cozy, Inc., manufactures small and large blankets. It estimates $950,000 in overhead during the manufacturing of 360,000 small blankets and 120,000 large blankets. What is the predetermined overhead rate if a small blanket takes 2 hours of direct labor and a large blanket takes 3 hours of direct labor?
Active Frame, Inc., manufactures clear and tinted sport glasses. The manufacturing of clear glasses takes 45,000 direct labor hours and involves 1,700 parts and 115 inspections. The manufacturing of tinted glasses takes 115,000 direct labor hours and involves 1,400 parts and 450 inspections. The traditional method applies $560,000 of overhead on the basis of direct labor hours. What is the amount of overhead per direct labor hour applied to the clear glass products? A. $933.33 B. $157,500 C. $322.500 D. $402,500
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