1. determine the manufacturing overhead rate that wold be used if elliot page in
ID: 2445485 • Letter: 1
Question
1. determine the manufacturing overhead rate that wold be used if elliot page inc. used the standard costing method
2. Detemine the total amount of overhead allocated to each product using standard costing method
3. Determine the product costs for backpacks and purses using the standard rate - overhead cost per unit, and total cost per unit
4. determine the manufacturing overhead rate for each of the six cost pools using the ABC costing method.
5. Determine the total amount of overhead allocated to each product using Activity based costing.
6. Determine the product costs for backpacks and purses using the ABC rate - overhead cost per unit, and total cost per unit.
Explanation / Answer
(1) Determination of the manufacturing overhed rate by using standard costing method.We have,
Manufacturing overhead rate = Budgeted overheads for the period / Budgeted normal base for the period
Manufacturing overhead rate = 800,000 / 50,000 = $ 16 per direct laour hour.
Note: We assume normal base for the period is labour hours.
(2) Determination of the total amount of overhead allocated to each product using standard costing method.We have,
(3) Determination of product costs for backpacks and purses using the standard rate.We have,
(4) Computation of manufacturing overhead rate using ABC costing method.We have,
(5) Computation of the total amount of overhead allocated to each product.We have,
(6) Computation of product cost for both product.We have,
Products Total Labour hours Overhead rate per Direct Labour hours Total Allocated Amount Backpacks 10,000 16.00 $ 160,000 Purses 40,000 16.00 $ 640,000 Total Budgeted Overhead $ 800,000Related Questions
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