minnie moore corporation has the following overhead costs and cost dirvers. dire
ID: 2365527 • Letter: M
Question
minnie moore corporation has the following overhead costs and cost dirvers. direct labor hours are estimated at 100000 for the year
activity cost pool cost driver esr. overhead cost driver activity
ordering and recieving orders 120000 500 orders
machine setup setups 297000 450 setups
machining Machine hours 1,500,000 125,000 MH
assembly Parts 1.200,000 1,000,000 parts
inspection inspectios 300000 500 inspections
if overhead is applied using activity based costing, the overhead application rate for ordering and recieving is
Explanation / Answer
Total Overhead Cost = $120,000 + $297,000 + $1,500,000 + $1,200,000 + $300,000
Total Overhead Cost = $3,417,000
Direct Labor hours = 100,000 hours
If Overhead is applied using Traditional Costing based on direct labor hours = [$3,417,000 / 100,000]
= $34.17
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