Computing Overhead using Activity Based Costing; Company A: Estimated Annual Overhead: $950,000Overhead Allocated to Cost Pools: Machine Setups: 22%; Machining: 68%; Inspections: 10%;**Overhead Rate - Round to hundredthsCost PoolsMachine SetupsMachining# of SetupsMachine HoursCost DriversOverhead Allocated toCost PoolsExpected Use of DriversOverhead Rate perDriver3200Inspections# of Inspections50,0004000Use of DriversUse of DriversCost DriversProduct AProduct BOverhead Allocated toProduct AOverhead Allocated toProduct B# of Setups11002100Machine Hours32,000# of Inspections280018,0001200Total Overhead Applied to ProductsUnits Produced: Product A: 45,000; Product B: 80,000**Round to nearest hundredth**Overhead Cost per Unit: Product A:Product B:$75.00DM per unit: $18.50

Name: Computing Overhead using Activity Based Costing; Company A: Estimated
Uploaded: 2024-03-20T06:33:06.000Z
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Description: Computing Overhead using Activity Based Costing; Company A: Estimated Annual Overhead: $950,000Overhead Allocated to Cost Pools: Machine Setups: 22%; Machining: 68%; Inspections: 10%;**Overhead Rate - Round to hundredthsCost PoolsMachine SetupsMachi

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Computing Overhead using Activity Based Costing; Company A: Estimated Annual Overhead: $950,000 Overhead Allocated to Cost Pools: Machine Setups: 22%; Machining: 68%; Inspections: 10%; **Overhead Rate - Round to hundredths Cost Pools Cost Drivers Overhead Allocated to Cost Pools Expected Use of Drivers Overhead Rate per Driver Machine Setups # of Setups 3200 Machining Machine Hours 50,000 Inspections # of Inspections 4000 Use of Drivers Use of Drivers Overhead Allocated to Cost Drivers Product A Product B Product A Overhead Allocated to Product B # of Setups 1100 Machine Hours 32,000 2100 18,000

Computing Overhead using Activity Based Costing; Company A: Estimated Annual Overhead: $950,000 Overhead Allocated to Cost Pools: Machine Setups: 22%; Machining: 68%; Inspections: 10%; **Overhead Rate - Round to hundredths Cost Pools Cost Drivers Overhead Allocated to Cost Pools Expected Use of Drivers Overhead Rate per Driver Machine Setups # of Setups 3200 Machining Machine Hours 50,000 Inspections # of Inspections 4000 Use of Drivers Use of Drivers Overhead Allocated to Cost Drivers Product A Product B Product A Overhead Allocated to Product B # of Setups 1100 Machine Hours 32,000 2100 18,000

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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Predetermined Overhead Rate; Disposing of Underapplied or Overapplied Overhead Luzadis Company makes furniture using the latest automated technology. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of machine-hours. The predetermined overhead rate was based on a cost formula that estimates $900,000 of total manufacturing overhead for an estimated activity level of 75,000 machine-hours. During the year, a large quantity of furniture on the market resulted in cutting back production and a buildup of furniture in the company’s warehouse. The company’s cost records revealed the following actual cost and operating data for the year: Required: 1. Compute the underapplied or overapplied overhead. 2. Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. 3. Assume that the company allocates any underapplied or overapplied overhead proportionally to Work in…
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Assume that Swifty has identified three activity cost pools.
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