### EA10**LO 6.3 Custom's** has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are:**Cost Pool Table:**| Cost Pool | Cost Driver | Estimated Activity per Driver | Estimated Overhead ||--------------|----------------------|-------------------------------|--------------------|| Material | Material requisitions| 14,000 | $52,500 || Machining | Machine hours | 186,400 | $363,500 || Inspection | Number of inspections| 10,000 | $75,000 |**What is the predetermined overhead rate for each activity?**Note: This table provides an overview of the different cost pools within a manufacturing process, identifying their respective cost drivers, the estimated activity levels associated with each driver, and the estimated overhead costs tied to each pool. Understanding these allocations is critical for accurate financial planning and cost management in manufacturing operations.---To calculate the predetermined overhead rate for each activity, divide the estimated overhead by the estimated activity per driver for each cost pool. This provides a measure of the overhead costs allocated per unit of activity, which is essential for accurate budgeting and financial analysis in manufacturing scenarios.

Predetermined overhead rate is used to calculate the estimated overhead. It shows the rate at which…

EA10. LO 6.3Custom's has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: Estimated gverhead $ 52,500 363,500 75,000 Estimated Activity per Driver Cost Pool Cost Driver Material requisitions Machine hours Number of inspections 14,000 186,400 10,000 Material Machining Inspection What is the predetermined overhead rate for each activity?

EA10. LO 6.3Custom's has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: Estimated gverhead $ 52,500 363,500 75,000 Estimated Activity per Driver Cost Pool Cost Driver Material requisitions Machine hours Number of inspections 14,000 186,400 10,000 Material Machining Inspection What is the predetermined overhead rate for each activity?

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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3 2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea, and it came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities follow: 5 ints 00:40:40 Activity Cost Pool and Activity Measure Purchase orders (number of orders) Rework requests (number of requests) Product testing (number of tests) Machine related (machine-hours) Activity Cost Pool Purchase orders Rework requests Product testing Machine related Estimated Overhead Cost $ 170,000 374,400 350,000 1,150,000 $2,044,400 Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools. Activity Rate per order per request per test per MH Deluxe 1,000 600 5,000 18,000 Activity Regular 1,500 1,200 12,500 28,000 Total 2,500 1,800 17,500 46,000 3. Assume that actual activity is as expected for the year. Using activity-based costing, do the following: a. Determine the…
The Mamon company manufactures several different products. Unit costs associated with product ABC are as follows.Direct materials P60Direct manufacturing labor… P10VARIABLE MANUFACTURING OVERHEAD… 18FIXED MANUFACTURING OVERHEAD… 32SALES COMMISSIONS… 4ADMINISTRATIVE SALARIES… 16TOTAL… 140 1.HOW MUCH IS THE PERIOD COST PER UNIT
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Z Company uses activity based costing and gives you the following data regarding cost pools and estimated overhead cost for each pool. Machine related RO 80,000 Material handling RO 130,000 Purchase related RO 340,000 General factory RO 320,000 The amount of total estimated overhead is: a. RO 660,000 b. RO 550,000 c. RO 790,000 d. RO 870,000 fast just choose
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Production and cost data Production and sales units Selling price (per unit) Materials (per unit) Labor (per unit) Manufacturing overheads Dept. A Standrad 192000 24000 $15 1.7 4.3 Dept. B Designer wear Number of machine set-ups 4 Marketing overheads $50 8 14.2 24 Engineering and PC Marketing and CS 745200 1296000 Use single-rate; direct method to allocate engineering and marketing overheads Engineering overheads include machine setting ($460,800) and inspection ($284,400) activities. Marketing involves channel ($496,000) and branding ($800,000) activities. The inspection and channel costs are driven by the number of units produced & sold. Computing product costs and profits under conventional and ABC approaches
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