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E4-18A Compute activity rates and apply them to products (Learning Objective 2) Zebra Steel recently implemented an activity-based costing system. At the beginning of the year, management identified five manufacturing activities that incur the manufactur- ing overhead cost. Management also made the following budget for costs and activities in the company's five activity cost pools: Cost Driver Expected Overhead Cost Expected Activity Activity Labor related. Direct labor hours S380,000 47,500 direct labor hours Production orders. Number of orders $120,000 1,200 orders Machine setup. Number of setups $180,000 1,000 setups Product testing.. Number of tests $150,000 1,500 tests General factory. Number of machine hours $200,000 40,000 machine hours The expected activity for Product A is as follows: Total expected activity Product A Labor related. 3,800 direct labor hours Production orders. 600 orders Machine setup. 53 setups Product testing. 250 tests General factory. 2,500 machine hours Requirement Compute the cost allocation rate for each activity and the total manufacturing overhead cost assigned to Product A.

E4-18A Compute activity rates and apply them to products (Learning Objective 2) Zebra Steel recently implemented an activity-based costing system. At the beginning of the year, management identified five manufacturing activities that incur the manufactur- ing overhead cost. Management also made the following budget for costs and activities in the company's five activity cost pools: Cost Driver Expected Overhead Cost Expected Activity Activity Labor related. Direct labor hours S380,000 47,500 direct labor hours Production orders. Number of orders $120,000 1,200 orders Machine setup. Number of setups $180,000 1,000 setups Product testing.. Number of tests $150,000 1,500 tests General factory. Number of machine hours $200,000 40,000 machine hours The expected activity for Product A is as follows: Total expected activity Product A Labor related. 3,800 direct labor hours Production orders. 600 orders Machine setup. 53 setups Product testing. 250 tests General factory. 2,500 machine hours Requirement Compute the cost allocation rate for each activity and the total manufacturing overhead cost assigned to Product A.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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E4-18A Compute activity rates and apply them to products (Learning Objective 2) Zebra Steel recently implemented an activity-based costing system. At the beginning of the year, management identified five manufacturing activities that incur the manufactur- ing overhead cost. Management also made the following budget for costs and activities in the company's five activity cost pools: Cost Driver Expected Overhead Cost Expected Activity Activity Labor related. Direct labor hours S380,000 47,500 direct labor hours Production orders.. Number of orders $120,000 1,200 orders Machine setup. Number of setups $180,000 1,000 setups Product testing.. Number of tests $150,000 1,500 tests General factory. Number of machine hours $200,000 40,000 machine hours The expected activity for Product A is as follows: Total expected activity Product A Labor related. 3,800 direct labor hours Production orders.. 600 orders Machine setup. 53 setups Product testing. 250 tests General factory. 2,500 machine hours Requirement Compute the cost allocation rate for each activity and the total manufacturing overhead cost assigned to Product A.
Transcribed Image Text:E4-18A Compute activity rates and apply them to products (Learning Objective 2) Zebra Steel recently implemented an activity-based costing system. At the beginning of the year, management identified five manufacturing activities that incur the manufactur- ing overhead cost. Management also made the following budget for costs and activities in the company's five activity cost pools: Cost Driver Expected Overhead Cost Expected Activity Activity Labor related. Direct labor hours S380,000 47,500 direct labor hours Production orders.. Number of orders $120,000 1,200 orders Machine setup. Number of setups $180,000 1,000 setups Product testing.. Number of tests $150,000 1,500 tests General factory. Number of machine hours $200,000 40,000 machine hours The expected activity for Product A is as follows: Total expected activity Product A Labor related. 3,800 direct labor hours Production orders.. 600 orders Machine setup. 53 setups Product testing. 250 tests General factory. 2,500 machine hours Requirement Compute the cost allocation rate for each activity and the total manufacturing overhead cost assigned to Product A.
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