Question: Problem # 7: Show the required calculations for the following two problems. A manufacturer produces three products: A, B, and C. The company uses the
Problem # 7:
Show the required calculations for the following two problems.
A manufacturer produces three products: A, B, and C.
The company uses the following information to determine activity rates for each pool:
Cost Pool
Costs
Total Activity
Pool 1
$300,000
20,000 hours
Pool 2
$20,000
500 pounds
Pool 3
$10,000
100 moves
Total
$330,000
Data concerning the three products appear below:
Cost Driver
Products A
Products B
Products C
Number of hours
10,000
7,500
2,500
Number of pounds
150
250
100
Number of moves
20
30
50
What is the total amount of overhead applied to product A?
A running shoe manufacturer produces three types of shoes: traditional, minimalist, and spikes.
The company uses the following information to determine activity rates for each pool:
Cost Pool
Costs
Total Activity
Shoe Production
$250,000
20,000 pairs of shoes
Shoe batches
$10,000
500 batches
Shoe design
$5,000
100 parts
Total
$265,000
Data concerning the three shoe products appear below:
Cost Driver
Traditional
Minimalist
Spikes
Number of pairs of shoes
10,000
7,500
2,500
Number of batches
150
250
100
Number of parts
20
30
50
What is the total amount of overhead applied to spikes shoes?
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