Exercise 17-4 (Part Level Submission) Car Truck (a1) Open Show Work SHOW SOLUTIO

Question

Exercise 17-4 (Part Level Submission)

Car

Truck

(a1)

Open Show Work

SHOW SOLUTION

LINK TO TEXT

(a2)

Open Show Work

SHOW SOLUTION

LINK TO TEXT

(b)

Activity Cost Pools

Expected Use of
Cost Drivers

Estimated Overhead
Costs

Overhead Rates

Open Show Work

SHOW SOLUTION

LINK TO TEXT

(c)

Expected Use of Cost Drivers per Product

Car

Truck

Car Wheels

Truck Wheels

Open Show Work

LINK TO TEXT

LINK TO TEXT

Exercise 17-4 (Part Level Submission)

Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information.

Car

Truck

Estimated wheels produced 42,000 11,000 Direct labor hours per wheel 1 3
Total estimated overhead costs for the two product lines are $863,000.

Explanation / Answer

Overhead Rates Setting up machines 227.00 =227000/1000 Assembling 4.63 =347000/75000 Inspection 240.83 =289000/1200 Car Wheels Truck Wheels Setting up machines 45400 181600 Assembling 194460 152790 Inspection 24083 264913 Total cost assigned 263943 599303 Alternative solution: If overhead rate is not rounded off Car Wheels Truck Wheels Setting up machines 45400 181600 Assembling 194320 152680 Inspection 24083 264917 Total cost assigned 263803 599197

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