The controller for Washington Co. established the following overhead cost pools and cost drivers: a. What is
Question:
a. What is the overhead rate per machine hour if the number of machine hours (MHs) is used as a single cost driver under traditional costing system?
b. Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver?
c. Utilizing ABC, how much total overhead is assigned to the order?
Transcribed Image Text:
Estimated Budgeted Cost Driver Level Overhead Overhead Cost Pool Cost Driver $60,000 # of inspections $100,000 # of setups Quality controls 2,000 inspections Machine setups 20,000 setups $90,000 # of machine hrs 2,500 Other overhead costs machine hrs Total overhead costs $250,000 A recent order for sailboats used: 400 inspections Quality inspections Machine setups 2,500 setups 300 machine hours Machine hours (MHs)
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Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
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