Window Help Untitled Edited Verdana C Regular 12 3. X Company uses an activity-b

ID: 2406760 • Letter: W

Question

Window Help Untitled Edited Verdana C Regular 12 3. X Company uses an activity-based costing overhead allocation system. It has identified three activities and three cost drivers. The activities and budgeted costs are as follows: Activity Setup Product Testing Machine Maintenance Budgeted Cost $113,000 $55,000 $61,000 The following cost driver information is available for the company's only two products, A and B: Cost Driver setup hours tests machine hours Product A 28,600 52,400 66,300 Product B 64,100 44,000 46,200 How much overhead was allocated to Product B? (round overhead rates to two decimal places)? Questions 4 and 5 refer to the following information: X Company has two production departments, A and B. At the start of the year, the following budgeted information is available: Department A Overhead Direct labor hours Machine hours $3,800,000 50,000 110,000 Department B Overhead Direct labor hours Machine hours $1,900,000 40,000 140,000 The following information is for two specific jobs, Job 111 and Job 222, that were completed during the year: Department A Department B Job 111 Direct labor hours 741 174 7 MacBook ?0 F10

Explanation / Answer

(3) O/H Allocation to Dept B :-

Setup (113000/{28600 + 64100}) * 64100

78137

Product Testing (55000/{52400 + 44000}) * 44000

25104

Machine maintainance (61000/{66300+46200}*46200

25051

O/H Allocation to Dept B

128292

(4)O/H Rates:-

Dept A

Dept B

Overhead

3800000

1900000

Direct Labour Hrs

50000

40000

O/H Rate

47.5

Allocation to Job 111:-

Dept A (741 * 76)

56316

Dept B (174 * 47.5)

8265

Allocation to Job 111

64581

(5) O/H Rates :-

Dept A

Dept B

Overhead

3800000

1900000

Direct Labour Hrs

50000

-----

Machine Hrs

-----

140000

O/H Rate

13.57

Allocation to Job 111:-

Dept A (741 * 76)

56316

Dept B (860 * 13.57)

11670

Allocation to Job 111

67986