Toylands Manufacturing's accountant gathered the following information:

Activity	overhead costs	cost driver	Product X1	Product
Processing Department
To create	200.000 $	number of installations	200	50
processing	700.000	machine hours	20.000	15.000
Packaging Department
Meeting	300.000	Direct labor hours	40.000	60.000
Check	180.000	Number of inspections	120	60

SHOW YOUR STEPS, then choose the correct answer:

1- If the department allocation method is used, what is the overhead rate for the Machining department whose allocation basis is machine hours? (2 points)

A. $39.43 per machine hour.

B. $13.71 per machine hour.

C. $20 per machine hour.

D. $25.71 per machine hour.

2- What is the share of the X2 product in the Packaging department overheads when activity-based costing is used? (2 points)

A. $270,000.

B. $240,000.

C. $580,000.

D. $380,000.

3- When using activity-based costing, how much of the overhead cost is allocated to product X1? (2 points)

A. $580,000.

B. $800,000.

C. $950,000.

D. $670,000.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below To solve this problem we need to use the concept of activitybased costing and departmenta... View the full answer