Brief Exercise 16-6 Weisman, Inc. uses activity-based costing as the basis for i

Question

Brief Exercise 16-6 Weisman, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats. Estimated Expected Use of Activity Cost Pools Overhead Cost Drivers per Activity $425,000 10,000 designer hours 3,950,000 150,000 machine hours Sizing and cutting Stitching and trimming Wropping and packing 1,400,000 75,000 labor hours 00,000 30,000 finished units Compute the activity-based overhead rates using the following budgeted data for each of the activity cost pools. (Round answers to 2 decimal places, e.g. 12.25 Activity-based overhead rates per designer hour per machine hour Designing Sizing and cutting Stitching and trimming Wrapping and packing per finished unit

Explanation / Answer

Designing = $425,000 / 10,000 designer hours = $42.50 per designer hour

Sizing and cutting = $3,950,000 / 150,000 machine hours = $26.33 per machine hour

Stitching and trimming = $1,400,000 / 75,000 labor hours = $18.67 per labor hour

Wrapping and packing = $300,000 / 30,000 finished units = $10.00 per finished unit

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