Bonita Co. estimates that it will incur $1260000 of overhead costs each year in its three...

 

Transcribed Image Text:

Bonita Co. estimates that it will incur $1260000 of overhead costs each year in its three main departments, machining ($720000), inspections ($360000) and packing ($180000). The machining department works 4000 hours per year, there are 600 inspections per year, and the packing department packs 1000 orders per year. Information about Bonita's two products and their estimated use of cost drivers is as follows: Product X Product Y Machining hours 1000 3000 Inspections 100 500 Orders packed 350 650 Direct labor hours 1700 1800 If traditional costing based on direct labor hours is used, how much overhead will be assigned to Product X? Bonita Co. estimates that it will incur $1260000 of overhead costs each year in its three main departments, machining ($720000), inspections ($360000) and packing ($180000). The machining department works 4000 hours per year, there are 600 inspections per year, and the packing department packs 1000 orders per year. Information about Bonita's two products and their estimated use of cost drivers is as follows: Product X Product Y Machining hours 1000 3000 Inspections 100 500 Orders packed 350 650 Direct labor hours 1700 1800 If traditional costing based on direct labor hours is used, how much overhead will be assigned to Product X?

Answer rating: 100% (QA)

Under traditional costing based on direct labor hours the overhead costs are allocated to products b... View the full answer