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. Car Truck Estimated wheels produced 36,000 12,000 Direct labor hours per wheel 1 Total estimated overhead costs for the two product lines are $765,000. Calculate overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) Overhead rate $ per direct labor hour eTextbook and Media Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs. (Round answers to 0 decimal places, e.g. 1,575.) Car wheels $ Truck wheels %24 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. Expected Use of Estimated Overhead Activity Cost Pools Cost Drivers Costs Setting up machines 1,000 setups $217,000 Assembling 72,000 labor hours 274,000 Inspection 1,200 inspections 274,000 Compute the activity-based overhead rates for these three cost pools. (Round answers to 2 decimal places, eg. 12.25.) Overhead Rates Setting up machines $ Assembling $ Inspection %24 %24 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. (Round answers to 0 decimal places, e.g. 1,575.) Expected Use of Cost Drivers per Product Car Truck Number of setups 200 800 Direct labor hours 36,000 36,000 Number of inspections 100 1,100 Car Wheels Truck Wheels Setting up machines $ 24 Assembling $ Inspection $ $ Total cost assigned $ $ %24 %24 %24 %24 %24 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. Car Truck Estimated wheels produced 36,000 12,000 Direct labor hours per wheel 1 Total estimated overhead costs for the two product lines are $765,000. Calculate overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) Overhead rate $ per direct labor hour eTextbook and Media Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs. (Round answers to 0 decimal places, e.g. 1,575.) Car wheels $ Truck wheels %24 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. Expected Use of Estimated Overhead Activity Cost Pools Cost Drivers Costs Setting up machines 1,000 setups $217,000 Assembling 72,000 labor hours 274,000 Inspection 1,200 inspections 274,000 Compute the activity-based overhead rates for these three cost pools. (Round answers to 2 decimal places, eg. 12.25.) Overhead Rates Setting up machines $ Assembling $ Inspection %24 %24 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. (Round answers to 0 decimal places, e.g. 1,575.) Expected Use of Cost Drivers per Product Car Truck Number of setups 200 800 Direct labor hours 36,000 36,000 Number of inspections 100 1,100 Car Wheels Truck Wheels Setting up machines $ 24 Assembling $ Inspection $ $ Total cost assigned $ $ %24 %24 %24 %24 %24
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C1 Overhead Rate Total Estimated Overhead cost 765000 Total ... View the full answer
Related Book For
Accounting Tools for business decision making
ISBN: 978-0470095461
4th Edition
Authors: kimmel, weygandt, kieso
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