Y Company estimated that it total overhead cost of $600,000. It is considering implementing activity-based costing....
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Y Company estimated that it total overhead cost of $600,000. It is considering implementing activity-based costing. Three cost pools (and activity measures) have been identified: machine-related (machine-hours), production orders (number of orders), and product testing (number of tests). The estimated overhead was assigned to the pools as follows: $200,000 to machine-related, $100,000 to production orders, $300,000 to product testing. Y Company produces two products. The following information is available: Product 2 10,000 200 9,000 15,000 Product 1 40,000 800 6,000 25,000 The company currently uses traditional costing and allocates overhead based on direct labor-hours. Machine-hours Orders Tests Direct labor hours a). How much overhead is assigned to Product 1 using traditional costing? b). How much a) $375,000 b) $300,000 c) $325,000 d) $225,000 overhead would be assigned to Product 1 if ABC is used? a) $300,000 b) $173,000 c) $420,000 d) $360,000 Y Company estimated that it total overhead cost of $600,000. It is considering implementing activity-based costing. Three cost pools (and activity measures) have been identified: machine-related (machine-hours), production orders (number of orders), and product testing (number of tests). The estimated overhead was assigned to the pools as follows: $200,000 to machine-related, $100,000 to production orders, $300,000 to product testing. Y Company produces two products. The following information is available: Product 2 10,000 200 9,000 15,000 Product 1 40,000 800 6,000 25,000 The company currently uses traditional costing and allocates overhead based on direct labor-hours. Machine-hours Orders Tests Direct labor hours a). How much overhead is assigned to Product 1 using traditional costing? b). How much a) $375,000 b) $300,000 c) $325,000 d) $225,000 overhead would be assigned to Product 1 if ABC is used? a) $300,000 b) $173,000 c) $420,000 d) $360,000
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Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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