Do It! Review 17-2 Flynn Industries has three activity cost pools and two produc
ID: 2552813 • Letter: D
Question
Do It! Review 17-2 Flynn Industries has three activity cost pools and two products. It expects to produce 3,000 units of Product BC113 and 1,500 of Product AD908. aving identified its activity cost pools and the cost drivers for each pool, Flynn accumulated the following data relative to those activity cost pools and cost drivers Expected Use of Cost Drivers per Product Annual Overhead Data Product Estimated Overhead $16,000 110,000 30,000 Expected Use of Cost Product Activity Cost Pools Machine setup Machining Packing Cost Drivers Setups Machine hours Orders Drivers per Activity BC113 AD908 15 4,000 350 40 5,000 500 25 1,000 150 Using the above data, do the following: Prepare a schedule showing the computations of the activity-based overhead rates per cost driver. Expected Use of Cost Drivers per Activity Activity-Based Overhead Rates Activity Cost Estimated Pools Overhead setups Machine setup Machining Packing per setup per machine hr. per order achine hours ordersExplanation / Answer
Answer:
1
Activity
Cost
Estimated
Total
Overhead
cost
Drivers
total
Drivers
rates
pools
overhead
per driver
Machine set up
Set up
$16,000
40 set up
$400
Machining
Machine hours
$110,000
5,000 M. Hr.
$22
Packaging
Orders
$30,000
500 order
$60
Total:
156,000
$482
___________________________________________________________________________
2
Activity
Cost
Rate
Total
Cost
Total
Cost
cost
per cost
per
drivers
Assigned
drivers
Assigned
pools
driver
cost
for
to
for AD 908
to AD 908
driver
BC 113
BC 113
Set up
Set up no.
$400
25
$10,000
15
$6,000
Machining
M/C hour
$22
1,000
$22,000
4,000
$88,000
Packing
Orders
$60
150
$9,000
350
$21,000
Total
$41,000
$115,000
Devided by
Quantity
3,000
1,500
Cost per unit
$13.67
$76.67
BC 113
AD 908
Overhead rates per unit
$13.67
$76.67
Activity
Cost
Estimated
Total
Overhead
cost
Drivers
total
Drivers
rates
pools
overhead
per driver
Machine set up
Set up
$16,000
40 set up
$400
Machining
Machine hours
$110,000
5,000 M. Hr.
$22
Packaging
Orders
$30,000
500 order
$60
Total:
156,000
$482
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