Keeley Company makes products C and D. Information for overhead costs and for th
ID: 2460984 • Letter: K
Question
Keeley Company makes products C and D. Information for overhead costs and for the two products appears below. The company makes 50,000 units of product C each year and 20,000 units of Product D.
Activity
Driver
Total Overhead Cost
Prod C Usage
Prod D usage
Setups
# of setups
$200,000
500 setups
1,500 setups
Ordering parts
# of parts
$300,000
60,000 parts
40,000 parts
Machining
MH
$600,000
12,000 MH
6,000 MH
Inspections
# of Insp
$400,000
10,000 Insp
40,000 Insp
Shipping
# of shipments
$300,000
10,000 Ship
10,000 Ship
Total overhead
$1,800,000
* MH – Machine Hours
Insp – Inspections
Ship - Shipments
How much overhead would be assigned to each unit of Product C?
$860,000 per unit
$100 per unit
$47 per unit
$17.20 per unit
Activity
Driver
Total Overhead Cost
Prod C Usage
Prod D usage
Setups
# of setups
$200,000
500 setups
1,500 setups
Ordering parts
# of parts
$300,000
60,000 parts
40,000 parts
Machining
MH
$600,000
12,000 MH
6,000 MH
Inspections
# of Insp
$400,000
10,000 Insp
40,000 Insp
Shipping
# of shipments
$300,000
10,000 Ship
10,000 Ship
Total overhead
$1,800,000
* MH – Machine Hours
Insp – Inspections
Ship - Shipments
Explanation / Answer
Activity Total Overhead Cost Total Usage Prod C Usage Prod D usage Prod C Overhead Setups $200,000 2,000 500 1,500 50,000 Ordering parts $300,000 100,000 60,000 40,000 180,000 Machining $600,000 18,000 12,000 6,000 400,000 Inspections $400,000 50,000 10,000 40,000 80,000 Shipping $300,000 20,000 10,000 10,000 150,000 Total overhead $1,800,000 860,000 Prod C Overhead per unit : 860000/50000 $ 17.20
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.