Sheridan Machining makes three products. The companys annual budget includes $1,104,300 of overhead. In the past, the
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Sheridan Machining makes three products. The company’s annual budget includes $1,104,300 of overhead. In the past, the company allocated overhead based on expected capacity of 40,000direct labor hours. The company recently implemented an activity-based costing system and has determined that overhead costs can be broken into four overhead pools: order processing, setups, milling, and shipping. The following is a summary of company information:
Expected CostExpected ActivitiesOrder processing $283,900 17,000 orders Setups168,000 4,200 setups Milling 377,400 20,400 machine hours Shipping275,000 25,000 shipments $1,104,300
(b) | Calculate the company’s overhead rates using the activity-based costing pools. (Round answers to 2 decimal places, e.g. 15.25.) | ||||||||||||||||
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(a) | Calculate the company’s overhead rate based on direct labor hours. (Round answer to 2 decimal places, e.g. 15.25.) | |||
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