Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead...
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Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Estimated wheels produced Direct labor hours per wheel Car Overhead rate $ Truck 37,000 10,000 1 Total estimated overhead costs for the two product lines are $777,200. 3 Calculate overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) per direct labor hour Activa Go to S Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to assign overhead costs. Car wheels Truck wheels $ $ Hermann is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the truck wheels product line because of its complexity. He therefore develops the following three activity cost pools and related cost drivers to better understand these costs. Activity Cost Pools Setting up machines Assembling Inspection Estimated Overhead Costs $201,000 335,000 241,200 Estimated Use of Cost Drivers 1,000 setups 67,000 1,200 inspections labor hours Activ Go to S Compute the activity-based overhead rates for these three cost pools. Setting up machines $ Assembling Inspection $ LA $ Overhead Rates /setup /DLH /inspection Compute the cost that is assigned to the car wheels and truck wheels product lines using an activity-based costing system, given the following information. Use of Cost Drivers per Product Number of setups Direct labor hours Number of inspections Car 200 37,000 100 Truck 800 30,000 1,100 Acti Go to Setting up machines Assembling Inspection Total cost assigned $ $ $ $ Car Wheels $ $ $ $ Truck Wheels Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Estimated wheels produced Direct labor hours per wheel Car Overhead rate $ Truck 37,000 10,000 1 Total estimated overhead costs for the two product lines are $777,200. 3 Calculate overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) per direct labor hour Activa Go to S Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to assign overhead costs. Car wheels Truck wheels $ $ Hermann is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the truck wheels product line because of its complexity. He therefore develops the following three activity cost pools and related cost drivers to better understand these costs. Activity Cost Pools Setting up machines Assembling Inspection Estimated Overhead Costs $201,000 335,000 241,200 Estimated Use of Cost Drivers 1,000 setups 67,000 1,200 inspections labor hours Activ Go to S Compute the activity-based overhead rates for these three cost pools. Setting up machines $ Assembling Inspection $ LA $ Overhead Rates /setup /DLH /inspection Compute the cost that is assigned to the car wheels and truck wheels product lines using an activity-based costing system, given the following information. Use of Cost Drivers per Product Number of setups Direct labor hours Number of inspections Car 200 37,000 100 Truck 800 30,000 1,100 Acti Go to Setting up machines Assembling Inspection Total cost assigned $ $ $ $ Car Wheels $ $ $ $ Truck Wheels
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Answer Solution Total direct labor hours car Truck Total Estimated wheels produced 3700... View the full answer
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