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Smithson, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: Direct labor costs Machine hours Setup hours Packaging hours Machining Machine set up Packaging Family Model $76,200 2,000 200 The estimated overhead of $457,200 is allocated as follows: machining activity cost pool $243,840, machine set up $172,720 and packaging $40,640. S 50 Determine the overhead rates using the activity-based costing approach with three cost pools. (Round answers to 2 decimal places, eg. 15.25.) $ Deluxe Model $152,400 2,000 800 75 Overhead Rate 60.96 per hour 172.72 per hour 325.12 per hour

Smithson, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: Direct labor costs Machine hours Setup hours Packaging hours Machining Machine set up Packaging Family Model $76,200 2,000 200 The estimated overhead of $457,200 is allocated as follows: machining activity cost pool $243,840, machine set up $172,720 and packaging $40,640. S 50 Determine the overhead rates using the activity-based costing approach with three cost pools. (Round answers to 2 decimal places, eg. 15.25.) $ Deluxe Model $152,400 2,000 800 75 Overhead Rate 60.96 per hour 172.72 per hour 325.12 per hour

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter18: Activity-based Costing
Section: Chapter Questions
Problem 13E: Handbrain Inc. is considering a change to activity-based product costing. The company produces two...
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Smithson, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: 4 Direct labor costs Machine hours Setup hours Packaging hours Machining Machine set up Packaging Family Model $76,200 2,000 $ 200 $ 50 Deluxe Model The estimated overhead of $457,200 is allocated as follows: machining activity cost pool $243,840, machine set up $172,720 and packaging $40,640. $152,400 Determine the overhead rates using the activity-based costing approach with three cost pools. (Round answers to 2 decimal places, eg. 15.25.) 2,000 Overhead Rate 800 75 325.12 60.96 per hour 172.72 per hour per hour
Transcribed Image Text:Smithson, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: 4 Direct labor costs Machine hours Setup hours Packaging hours Machining Machine set up Packaging Family Model $76,200 2,000 $ 200 $ 50 Deluxe Model The estimated overhead of $457,200 is allocated as follows: machining activity cost pool $243,840, machine set up $172,720 and packaging $40,640. $152,400 Determine the overhead rates using the activity-based costing approach with three cost pools. (Round answers to 2 decimal places, eg. 15.25.) 2,000 Overhead Rate 800 75 325.12 60.96 per hour 172.72 per hour per hour
Determine the overhead allocation for the family model and the deluxe model using three activity cost pools. Family model $ Deluxe model $ What is the difference in allocation between two activity cost pools and three activity cost pools? Is the difference in allocation worth using the third activity cost pool? Difference Oerhead Allocation $ Save for Later The additional cost pool does not benefit benefit the overhead cost allocation significantly. Attempts: 0 of 1 used Submit Answer
Transcribed Image Text:Determine the overhead allocation for the family model and the deluxe model using three activity cost pools. Family model $ Deluxe model $ What is the difference in allocation between two activity cost pools and three activity cost pools? Is the difference in allocation worth using the third activity cost pool? Difference Oerhead Allocation $ Save for Later The additional cost pool does not benefit benefit the overhead cost allocation significantly. Attempts: 0 of 1 used Submit Answer
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