Jones Manufacturing Company makes two products. The
Jones Manufacturing Company makes two products. The company's budget includes $471,750 of overhead. In the past, the company allocated overhead based on
estimated total direct labor hours of 18,870. Jones recently implemented an activity-based costing system and had determined that overhead can be broken into
three overhead pools: processed purchase orders, machine setups, and good shipped. The following is a summary of company information:
Estimated Cost
Estimated Activities
Orders processed
$82,080 5,130 orders
Machine setups
14,300
550 machine hours
Shipping
35,532
56,400 shipments
$131,912
v (a)
Calculate the company's overhead rate based on total direct hours.
The company's overhead rate
$
per direct labor hour
Click if you would like to Show Work for this question: Open Show Work
