Bichon Company manufactures two products, Tini A and Tall B. Bichon's overhead costs consist of setting up machines, $1,200,000; machining, $2,700,000; and inspecting, $900,000. Information on thetwo products is: Tini A Tall B Direct labor hours 15,000 25,000 Machine setups 600 400 Machine hours 24,000 26,000 Inspections 800 700 Overhead applied to Tall B using traditional costing using direct labor hours is: A) $1,920,000. B) $2,304,000. C) $2,505,000. D) $3,000,000.

Bichon Company manufactures two products, Tini A and Tall B. Bichon's overhead costs consist of setting up machines, $1,200,000; machining, $2,700,000; and inspecting, $900,000. Information on thetwo products is: Tini A Tall B Direct labor hours 15,000 25,000 Machine setups 600 400 Machine hours 24,000 26,000 Inspections 800 700 Overhead applied to Tall B using traditional costing using direct labor hours is: A) $1,920,000. B) $2,304,000. C) $2,505,000. D) $3,000,000.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6PB: Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen...

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Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 s used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: How much does each unit cost to manufacture?
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Cozy, Inc., manufactures small and large blankets. It estimates $950,000 in overhead during the manufacturing of 360,000 small blankets and 120,000 large blankets. What is the predetermined overhead rate if a small blanket takes 2 hours of direct labor and a large blanket takes 3 hours of direct labor?
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