HelpI Problem 17-3A (Part Level Submission) Shaker Stairs Co. designs and builds

Question

HelpI Problem 17-3A (Part Level Submission) Shaker Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, stairways of varying lengths and risers, hangers, hand rails) permit installation of All are of white oak wood. Budgeted manufacturing overhead costs for the year 2017 are as follows. 74,400 Handling materials Production (cutting, milling, finishing) Setting up machines Inspecting 220,000 102,500 114,000 127,680 Utilities For the last 4 years, Shaker Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2017, 100,000 machine hours are budgeted. Jeremy Nolan of Shaker Stairs Co., recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. A foreman identity the following cost drivers and their usage for the previously budgeted overhead cost pools. Expected Use of Number of moves Direct laber hours Production (cutting, milling, finishing) Setting up machines Inspecting 100,000 1,250 6,000

Explanation / Answer

Req A: Pre-determined OH rate based on machine hours: Estimated Overheads/ Estimated Mmachine hours $ 1080,820 / 100,000 machine hours = 10.81 per MH

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