clezto.mheducation.com/hm.tpx Submit | Save & Exit Question (of22) Time remainin
ID: 2538784 • Letter: C
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clezto.mheducation.com/hm.tpx Submit | Save & Exit Question (of22) Time remaining: 2:01:26 18. Markham Company makes two products: Basic Product and Deluxe Product Annual production and sales are 2,400 the basis for applying all manufacturing overhead to products. Basic Product requires 0.3 direct labor hours per unt The company is considenng switching to en activity-based costing system for the purpose of computing unit product Actvity 1, Activty Product requires 06 direct labor hours per unit. The total estimated overhead for next period Is $99,785 r extenalr 2. and General Factory-with estimated overhead costs and expected activity as follows Expected Ac Deluxe Activty Cost Pool Activty Activity 2 General Factory Total Costs Besic Product $30,763 Total 2.350 2.350 1.920 650 450 1700 7.685 720 99,785 (Note: The General Factory actvity cost pool's costs are allocated on the basis of direct labor hours.) The predetermined overhead rate (l.e ectivity rate for Activity 2 under the activity-besed costing system is closest to: s4246 O $737 O $753 O $51.97 O Type here to searchExplanation / Answer
Calculation of predetermined overhead rate:
Predetermined overhead rate= Estimated cost/ expected activity
Expected activity=2350
Predetermined overhead rate= 17685/2350= 7.53
So correct answer is $7.53
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