I asked this question a few weeks ageo: Offshore Company makes 2 different types
ID: 2358729 • Letter: I
Question
I asked this question a few weeks ageo: Offshore Company makes 2 different types of boats sail and fishing boats. The company consists of two different departments, design & engineering, and production. The company has decided to allocate overhead costs in each of the two cost pools. Data on estimated overhead follows: Estimated Sail Fish Activity: Driver Overhead Cost Estimate Estimate Design # of designs $180,000 22 designs 18 designs Production Labor hours $945,000 4,000 hours 3,500 hours If the company produces and sells 22 sail boats, and each sail boat requires 180 labor hours, how much overhead will be assigned to each sail boat produced? The answer i received was this............................. Hi, Please find the calculations as follows: Design Cost: 180000/40 (22+18) = 4500 Production Cost = 945000*3960/7500 (4000+3500) = 22680 3960 is calculated my multiplying 180*22 = 3960 Total Overhead Cost Allocated : 4500 + 22680 = 27180 My question is where did 22680 come from? Because i multiplied 945000 times 3960 divided by 7500 and got 464940. Please help.Explanation / Answer
Offshore Company makes 2 different types of boats sail and fishing boats. The company consists of two different departments, design & engineering, and production. The company has decided to allocate overhead costs in each of the two cost pools. Data on estimated overhead follows:
Estimated Sail Fishing
Activity: Driver Overhead Cost Estimate Estimate
Design # of designs $180,000 22 designs 18 designs
Production Labor hours $945,000 4,000 hours 3,500 hours
If the company produces and sells 22 sail boats, and each sail boat requires 180 labor hours, how much overhead will be assigned to each sail boat produced?
A. $27,180 correct answer
B $22,680
C $36,900
D. $32,400
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