Acme Company manufactures and sells two products, Product A and Product B. Acme's total manufacturing overhead cost is $112,000, and Acme applies overhead to jobs using three activity-based overhead rates, computed as follows: Activity Setups Machining Packaging O $22.40 O $20.80 O $24.40 Cost pool Allocation base Number of setups Machine hours $10,000 Units packed O $24.80 ? ? Units of allocation base Product A Product B 20 setups ? 350 units If Acme decides to use a plantwide overhead rate with machine hours as the allocation base, what would be its plantwide overhead rate? 20 setups 1,000 hours 150 units Allocation rate $300 per setup $18 per MH ?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Acme Company manufactures and sells two products, Product A and Product B.
Acme's total manufacturing overhead cost is $112,000, and Acme applies overhead
to jobs using three activity-based overhead rates, computed as follows:
Activity
Setups
Machining
Packaging
$22.40
$20.80
Cost pool Allocation base
Number of setups
Machine hours
$24.40
$24.80
?
?
$10,000 Units packed
Units of allocation base
Product A
20 setups
1,000 hours
150 units
Product B
20 setups
?
350 units
If Acme decides to use a plantwide overhead rate with machine hours as the
allocation base, what would be its plantwide overhead rate?
Allocation rate
$300 per setup
$18 per MH
?
Transcribed Image Text:Acme Company manufactures and sells two products, Product A and Product B. Acme's total manufacturing overhead cost is $112,000, and Acme applies overhead to jobs using three activity-based overhead rates, computed as follows: Activity Setups Machining Packaging $22.40 $20.80 Cost pool Allocation base Number of setups Machine hours $24.40 $24.80 ? ? $10,000 Units packed Units of allocation base Product A 20 setups 1,000 hours 150 units Product B 20 setups ? 350 units If Acme decides to use a plantwide overhead rate with machine hours as the allocation base, what would be its plantwide overhead rate? Allocation rate $300 per setup $18 per MH ?
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