Project #13024 - Overhead Rates

Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.

   
Standard
 
Custom
Direct labor costs   $41,800   $104,000
Machine hours   1,370   1,220
Setup hours   100   400


Total estimated overhead costs are $298,200. Overhead cost allocated to the machining activity cost pool is $198,300, and $99,900 is allocated to the machine setup activity cost pool.

 Compute the overhead rate using the traditional (plantwide) approach. (Round answers to 2 decimal places, e.g. 12.25%.)

Predetermined overhead rate 204.53% of direct Labor

 

Please find the correct answers for Machining per hour and Machine Set Up.

Your answer is incorrect.  Try again.
   

Compute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, e.g. $12.25.)

Machining  
$
 per machine hour
Machine setup  
$
 per setup hour

 

 

 

 

 

 

       

Subject Business
Due By (Pacific Time) 09/23/2013 09:00 am
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