Bonita, Inc. produces two types of gas grills: a family model and a deluxe model. Bonita's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations: Direct labor costs Machine hours Setup hours Family Model $76,800 2,000 (a) 200 Deluxe Model $153,600 Overhead rate $ 2,000 Total estimated overhead costs are $460,800. Overhead cost allocated to the machining activity cost pool is $276,480 and $184,320 is allocated to the machine setup activity cost pool. 800 Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 15.25.)

Bonita, Inc. produces two types of gas grills: a family model and a deluxe model. Bonita's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations: Direct labor costs Machine hours Setup hours Family Model $76,800 2,000 (a) 200 Deluxe Model $153,600 Overhead rate $ 2,000 Total estimated overhead costs are $460,800. Overhead cost allocated to the machining activity cost pool is $276,480 and $184,320 is allocated to the machine setup activity cost pool. 800 Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 15.25.)

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Description: Bonita, Inc. produces two types of gas grills: a family model and a deluxe model. Bonita's controller has decided to use a plantwideoverhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and

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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