1. Compute total machine setups and inspection costs assigned to each product, u
ID: 2567269 • Letter: 1
Question
1. Compute total machine setups and inspection costs assigned to each product, using a single overhead rate.2. Compute total machine setups and inspection costs assigned to each product, using ABC.
1. Compute total machine setups and inspection costs assigned to each product, using a single overhead rate.
2. Compute total machine setups and inspection costs assigned to each product, using ABC.
Ovens Stoves Total Cost Machine Setups Inspections Labor Hours 200 250 2,600 2,400 600 48,000 470 $ 72,000
Explanation / Answer
1. single overhead rate = total cost / total labour hours
($ 48000 + $ 72000 ) / (2600+2400) = 24 per labour hour
Ovens : 2600 * 24 = $ 62400
Stoves : 2400 *24= $57600
total = $ 120000
2. ABC
Machine setups : 48000 / (200+600) = $60 per set up
Inspection : 72000 / (250+470) = $100 per inspection
Ovens : (200*60) + (250*100) = $37000
Stoves : (600*60) + (470*100) =$83000
total = $120000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.