Health Food company produces two exclusive products: food packages to lose weight and food packages to stabilize weight. The company has the following actual and budgeted data:

Budgeted overhead Rp. 360,000

Expected activity (DLH) 100,000 Actual activity (DLH) 100,000

Actual overhead Rp. $380,000

Food package to lose weight Food package to stabilize weight

Units produced 10,000 100,000

Prime costs 78,000 738,000

Direct labor hours 10,000 90,000

Required:

1. Please calculate the pre-determined overhead rate! (5 Points)
2. What is your opinion if Health food company use Activity based costing (ABC)? Is it possible?

Answer rating: 100% (QA)

Answer 1 Predetermined overhead rate should be 360 per labor hour 2 Yes if the breakdown of the overhead costs is given Explanation 1 To get the predetermined overhead rate we divide the budgeted manu... View the full answer