3- Kettle Snacks produces different styles of potato chips (ruffled, flat, thick-cut, gourmet)for different corporate customers. Each style of potato chips requires differentpreparation time, different cooking and draining times. Therefore, Kettle has decided totry ABC to better capture the manufacturing overhead costs incurred by each style ofchip. Kettle has identified the following activities related to yearly manufacturingoverhead costs and cost drivers associated with producing potato chips:ActivityPreparationCooking & drainingPackagingManufacturing Overhead$ 572,000$ 925,000$ 300,000Cost DriverPreparation timeCooking & draining timeUnits packagedCompute the activity cost allocation rates for each activity assuming the following totalestimated activity for the year: 13000 preparation hours, 25000 cooking and draininghours and 6 million packages. .

Allocation rate = manufacturing overhead amount/activity amount of the cost driver

Answered: Compute the activity cost allocation…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Compute the activity cost allocation rates for each activity assuming the following total estimated activity for the year: 13000 preparation hours, 25000 cooking and draining hours and 6 million packages.