During June, Assembly Department no. 4 of Hot Tech produced 17,500 model 201 computer keyboards. Assembly of
Question:
Overhead = 120% of Direct Labor Cost + $300 per Machine Hour
a. Compute the total amount of overhead cost applied to the 17,500 keyboards.
b. Compute the per-unit cost of manufacturing these keyboards.
c. Briefly explain why the department might use two separate activity bases in applying overhead costs to one type of product.
d. Identify at least two types of overhead cost pools that might be driven by each of the two cost drivers indicated in this situation.
e. What appears to be the primary driver of overhead costs in the manufacture of keyboards?
f. Compute the gross profit that will result from the sale of 6,000 of these keyboards at a sales price of $30 each.
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Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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