Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Units produced Production runs per quarter Standard 10,000 50 Premium 2,500 25 Direct materials cost per unit Direct labor cost per unit $ 30 50 $ 64 75 Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision Setup labor $206,250 Incoming inspection 240,000 172,500 $ 618,750 Total overhead Exercise 9-34 (Static) Activity-Based Costing and Cost Driver Rates (LO 9-4) Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter?
Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Units produced Production runs per quarter Standard 10,000 50 Premium 2,500 25 Direct materials cost per unit Direct labor cost per unit $ 30 50 $ 64 75 Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision Setup labor $206,250 Incoming inspection 240,000 172,500 $ 618,750 Total overhead Exercise 9-34 (Static) Activity-Based Costing and Cost Driver Rates (LO 9-4) Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Step 1: Introduction to predetermined overhead rate:
VIEWStep 2: Requirement a- Calculation of predetermined overhead rate:
VIEWStep 3: Requirement b- Calculation of supervision rate:
VIEWStep 4: Requirement b- calculation of setup labor rate:
VIEWStep 5: Requirement b- Calculation of incoming inspection rate:
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