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?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Required information
Exercise 9-34 and 9-35 (Static)
[The following information applies to the questions displayed below.]
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
Standard
10,000
Premium
2,500
Production runs per quarter
50
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
Incoming inspection
Total overhead
$ 206,250
240,000
172,500
$ 618,750
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?
b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following
cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming inspection.
Compute the cost driver rates for the proposed system at Benton.
Note: Round "Incoming inspection" answer to 1 decimal place.
a. Overhead rate
b. Supervision
b. Setup labor
b. Incoming inspection
% of direct labor cost
% of direct labor cost
per production run
% of direct material cost
Transcribed Image Text:i Required information Exercise 9-34 and 9-35 (Static) [The following information applies to the questions displayed below.] 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 Standard 10,000 Premium 2,500 Production runs per quarter 50 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 Incoming inspection Total overhead $ 206,250 240,000 172,500 $ 618,750 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? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming inspection. Compute the cost driver rates for the proposed system at Benton. Note: Round "Incoming inspection" answer to 1 decimal place. a. Overhead rate b. Supervision b. Setup labor b. Incoming inspection % of direct labor cost % of direct labor cost per production run % of direct material cost
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