Davis Manufacturing expects to produce 18,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below: ACTIVITIES UNIT LEVEL BATCH LEVEL PRODUCT LEVEL FACILITY LEVEL Cost $30,000 $40,000 Cost Driver 2,400 labor hrs 200 setups $10,000 % of use $140,000 18,000 units Production of 1,200 units of a solar panel required 480 labor hours, 14 setups, and consumed 40% of the product-sustaining activities. How much total overhead cost will be allocated to this product if the company allocates overhead on the basis of a single overhead allocation rate based on direct labor hours?

Davis Manufacturing expects to produce 18,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below: ACTIVITIES UNIT LEVEL BATCH LEVEL PRODUCT LEVEL FACILITY LEVEL Cost $30,000 $40,000 Cost Driver 2,400 labor hrs 200 setups $10,000 % of use $140,000 18,000 units Production of 1,200 units of a solar panel required 480 labor hours, 14 setups, and consumed 40% of the product-sustaining activities. How much total overhead cost will be allocated to this product if the company allocates overhead on the basis of a single overhead allocation rate based on direct labor hours?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 27E: Plata Company has identified the following overhead activities, costs, and activity drivers for the...

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