Answered: The Ordon Company manufactures products…

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 30P: Primera Company produces two products and uses a predetermined overhead rate to apply overhead....

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Question

The

Ordon

Company manufactures products in two departments: Mixing and Packaging. The company allocates manufacturing overhead using a single plantwide rate with direct labor hours as the allocation base. Estimated overhead costs for the year are

$888,000,

and estimated direct labor hours are

370,000.

October,

the company incurred

45,000

direct labor hours.

Read the

requirements

Requirement 1. Compute the predetermined overhead allocation rate. Round to two decimal places.

Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate.

					Predetermined OH
	÷		=	allocation rate

Requirement 2. Determine the amount of overhead allocated in

October.

Begin by selecting the formula to allocate overhead costs.

						Allocated mfg.
		×		=	overhead costs

The overhead allocated in October is

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