al costing system with labor hours as the cost driver but is preparation for the
ID: 2330302 • Letter: A
Question
al costing system with labor hours as the cost driver but is preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow: Case Leather Case 8,000 899 102 551 Total estimated overhead costs are $224,650, of which $181250 is assigned to the materials handing cost pool and $43,400 is assigned to the setup cost pool Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on direct labor hours. (Do not round intermediate calculations and round your final an S 152,762 2. Calculate the overhead assigned to the fabric case using ABC. (Round activity rates or activity proportions, s 73,625 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABc? O Type here to searchExplanation / Answer
Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations 1) Overhead assigned to fabric= 17,000/25,000 *224,650 152,762.00 2) Overhead assigned to fabric case 80,655.00 3) Overapplied overhead = 152,762 - 80,655 72,107.00 Refer Below workings for above answer Particulars Amount a Activity Driver No of Activity b Activity Rate No of Activity of Fabric case d Cost Allocated to Fabric case c*d No of Activity of Leather case e Cost Allocated to Leather case c*e Material Handling 181,250.00 No of material moves 1,450.00 125.00 551.00 68,875.00 899.00 112,375.00 Setupcost pool 43,400.00 No of setups 140.00 310.00 38.00 11,780.00 102.00 31,620.00 Total Overhead 224,650.00 80,655.00 143,995.00
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