EcoFabrics has budgeted overhead costs of $1,001,700. It has assigned overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 477,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Total estimated machine hours is 212,000, and total estimated number of setups is 1,590. Overhead allocated to the cutting cost pool is $381,600 and $620,100 is allocated to the design cost pool. Additional information related to product usage by these pools is as follows. Wool Cotton Machine hours 106,000 106,000 Number of setups 1,060 530 (a1) Calculate the overhead rate using activity based costing. (Round per machine hour to 2 decimal places, e.g. 12.25.) Overhead rates for activity-based costing Cutting $ Design $ per machine hour per setup
EcoFabrics has budgeted overhead costs of $1,001,700. It has assigned overhead on a plantwide basis to its two products (wool and cotton) using direct labor hours which are estimated to be 477,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Total estimated machine hours is 212,000, and total estimated number of setups is 1,590. Overhead allocated to the cutting cost pool is $381,600 and $620,100 is allocated to the design cost pool. Additional information related to product usage by these pools is as follows. Wool Cotton Machine hours 106,000 106,000 Number of setups 1,060 530 (a1) Calculate the overhead rate using activity based costing. (Round per machine hour to 2 decimal places, e.g. 12.25.) Overhead rates for activity-based costing Cutting $ Design $ per machine hour per setup
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:EcoFabrics has budgeted overhead costs of $1,001,700. It has assigned overhead on a plantwide basis to its two products (wool and
cotton) using direct labor hours which are estimated to be 477,000 for the current year. The company has decided to experiment with
activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost
driver is machine hours) and design (cost driver is number of setups). Total estimated machine hours is 212,000, and total estimated
number of setups is 1,590. Overhead allocated to the cutting cost pool is $381,600 and $620,100 is allocated to the design cost pool.
Additional information related to product usage by these pools is as follows.
Wool
Cotton
Machine hours
106,000
106,000
Number of setups
1,060
530
(a1)
Calculate the overhead rate using activity based costing. (Round per machine hour to 2 decimal places, e.g. 12.25.)
Overhead rates for activity-based costing
Cutting
$
Design
$
per machine hour
per setup
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