A. Calculate the overhead rates for each activity. B. Calculate the dollar amount of overhead that should be assigned to firm and to extra firm.
The company sells firm and extra firm mattresses. We plan to use ABC. The company has
accumulated the following data.
Activities Cost Cost Driver
Materials processing $1,400,000 Number of parts
Firmness testing 400,000
Number of tests
Customer calls 200,000 Number of customer calls
During the year, 100,000 parts were handled (75,000 for firm mattresses and 25,000 for
extra firm), 20,000 firmness tests were conducted (12,500 for firm and 7,500 for extra
firm), and 10,000 customers’ calls were answered (7,500 for firm and 2,500 for extra
firm)
A. Calculate the
B. Calculate the dollar amount of overhead that should be assigned to firm and to extra
firm.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
