Blue Spruce Tires manufactures tires for dune buggies and has two different products, nubby tires and smooth tires. The company produces 7,400 nubby tires and 12,400 smooth tires each year and incurs $384.160 of overhead costs. The following information in available: Activity Materials handling Machine setups Quality inspections Total Cost $124,320 131,320 128,520 Cost Driver Number of requisitions Number of setups Number of inspections For the nubby tires, the company has 640 requisitions, 440 setups, and 440 inspections. The smooth tires require 840 requisitions, 540 setups, and 640 inspections. Determine the overhead rate for each activity.
Blue Spruce Tires manufactures tires for dune buggies and has two different products, nubby tires and smooth tires. The company produces 7,400 nubby tires and 12,400 smooth tires each year and incurs $384.160 of overhead costs. The following information in available: Activity Materials handling Machine setups Quality inspections Total Cost $124,320 131,320 128,520 Cost Driver Number of requisitions Number of setups Number of inspections For the nubby tires, the company has 640 requisitions, 440 setups, and 440 inspections. The smooth tires require 840 requisitions, 540 setups, and 640 inspections. Determine the overhead rate for each activity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Blue Spruce Tires manufactures tires for dune buggies and has two different products, nubby tires and smooth tires. The company
produces 7,400 nubby tires and 12,400 smooth tires each year and incurs $384,160 of overhead costs. The following information is
available:
Activity
Materials handling
Machine setups
Quality inspections
Total Cost
$124,320
131,320
128,520
Cost Driver
Number of requisitions
Number of setups
Number of inspections
For the nubby tires, the company has 640 requisitions, 440 setups, and 440 inspections. The smooth tires require 840 requisitions,
540 setups, and 640 inspections.
Determine the overhead rate for each activity.
Overhead Rate
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