Mavericks, Inc. is a manufacturing company that produces basketball-related products: shooting sleeves and basketballs. ?They have traditionally used a single, predetermined overhead rate to allocate overhead to their products. ?Their 2 products go through very different manufacturing processes, so they are in the process of implementing an activity-based costing system to help them more accurately allocate overhead. ?
Chart 1 below shows the identified activities and driver information. ?Chart 2 shows the following resources that were used in their production activities.
If we are using an activity-based costing system how much overhead would we allocate to the Basketball product?

Transcribed Image Text:

CHART 1 Activity Estimated Overhead Volume of Driver Setups Machining Inspections $315,000 30,000 setups $680,000 175,000 machine hours 14,000 inspections $75,000 CHART 2 Activity Shooting Sleeve Setups Basketball 10,000 setups 19,000 setups Machining 60,000 machine hours 110,000 machine hours Inpsections 7,000 inspections 7,000 inspections CHART 1 Activity Estimated Overhead Volume of Driver Setups Machining Inspections $315,000 30,000 setups $680,000 175,000 machine hours 14,000 inspections $75,000 CHART 2 Activity Shooting Sleeve Setups Basketball 10,000 setups 19,000 setups Machining 60,000 machine hours 110,000 machine hours Inpsections 7,000 inspections 7,000 inspections

Answer rating: 100% (QA)

To allocate overhead to the basketball product using activitybased costing we need to calculat... View the full answer