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Acme Inc. applies manufacturing overhead using an ABC system. The total estimated overhead cost for the current year is $4,480,000. Here are selected data regarding the three activity based allocation rates:

Acme Inc. applies manufacturing overhead using an ABC system. The total estimated overhead cost for the current year is $4,480,000. Here are selected data regarding the three activity based allocation rates:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Acme Inc. applies manufacturing overhead using an ABC system. The total estimated overhead cost for the current year is $4,480,000. Here are selected data regarding the three activity based allocation rates: Activity Setups Assembly Packaging Estimated costs Estimated usage 1,600 setups Allocation base Setups Machine hours Units packaged ? ? $800,000 300 per setup 32 per machine hour To simplify its job costing system, Acme is thinking about using a single overhead rate with machine hours as the allocation base. If Acme used a single overhead rate based on machine hours rather than an ABC system, what would be the plantwide overhead rate? $44.80 $41.60 $48.80 $49.60 None of the above
Transcribed Image Text:Acme Inc. applies manufacturing overhead using an ABC system. The total estimated overhead cost for the current year is $4,480,000. Here are selected data regarding the three activity based allocation rates: Activity Setups Assembly Packaging Estimated costs Estimated usage 1,600 setups Allocation base Setups Machine hours Units packaged ? ? $800,000 300 per setup 32 per machine hour To simplify its job costing system, Acme is thinking about using a single overhead rate with machine hours as the allocation base. If Acme used a single overhead rate based on machine hours rather than an ABC system, what would be the plantwide overhead rate? $44.80 $41.60 $48.80 $49.60 None of the above
Acme Inc. applies manufacturing overhead using an ABC system. The total entit cost for the current year is $4,480,000. Here are selected data regarding the the act allocation rates: Activity Setups Assembly Packaging Estimated costs ? ? $800,000 To simplify its job costing system, Acme is thinking about using a single overhead rate with machine hours as the allocation base. If Acme used a single overhead rate based on machine hours rather than an ABC system, what would be the plantwide overhead rate? O$44.80 O $41.60 O$48.80 Allocation base Estimated usage Setups 1,600 setups Machine hours ? Units packaged 20,000 units O $49.60 O None of the above
Transcribed Image Text:Acme Inc. applies manufacturing overhead using an ABC system. The total entit cost for the current year is $4,480,000. Here are selected data regarding the the act allocation rates: Activity Setups Assembly Packaging Estimated costs ? ? $800,000 To simplify its job costing system, Acme is thinking about using a single overhead rate with machine hours as the allocation base. If Acme used a single overhead rate based on machine hours rather than an ABC system, what would be the plantwide overhead rate? O$44.80 O $41.60 O$48.80 Allocation base Estimated usage Setups 1,600 setups Machine hours ? Units packaged 20,000 units O $49.60 O None of the above
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