Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $481,440 Number of setups 590 Ordering costs 400,400 Number of orders 18,200 Machine costs 890,400 Machine hours 42,400 Receiving 468,000 Receiving hours 10,400 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $590,000 $845,000 Direct labor $495,000 $474,000 Units completed 16,600 8,100 Direct labor hours 5,400 1,600 Number of setups 440 150 Number of orders 5,300 12,900 Machine hours 24,800 17,600 Receiving hours 3,100 7,300 The company's normal activity is 7,000 direct labor hours.
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $481,440 Number of setups 590 Ordering costs 400,400 Number of orders 18,200 Machine costs 890,400 Machine hours 42,400 Receiving 468,000 Receiving hours 10,400 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $590,000 $845,000 Direct labor $495,000 $474,000 Units completed 16,600 8,100 Direct labor hours 5,400 1,600 Number of setups 440 150 Number of orders 5,300 12,900 Machine hours 24,800 17,600 Receiving hours 3,100 7,300 The company's normal activity is 7,000 direct labor hours.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 27E: Plata Company has identified the following overhead activities, costs, and activity drivers for the...
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Multiple Versus Single Overhead Rates, Activity Drivers
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year:
| Activity | Expected Cost | Activity Driver | Activity Capacity |
| Setting up equipment | $481,440 | Number of setups | 590 |
| Ordering costs | 400,400 | Number of orders | 18,200 |
| Machine costs | 890,400 | Machine hours | 42,400 |
| Receiving | 468,000 | Receiving hours | 10,400 |
Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
| Model A | Model B | |
| Direct materials | $590,000 | $845,000 |
| Direct labor | $495,000 | $474,000 |
| Units completed | 16,600 | 8,100 |
| Direct labor hours | 5,400 | 1,600 |
| Number of setups | 440 | 150 |
| Number of orders | 5,300 | 12,900 |
| Machine hours | 24,800 | 17,600 |
| Receiving hours | 3,100 | 7,300 |
The company's normal activity is 7,000 direct labor hours.
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