Evergreen Inc. expects to manufacture 4,000 refrigerators during the last quarter of the current year. The company uses activity-based costing to determine the product costs. The manufacturing activities and associated information is provided in the table below. Manufacturing Activities and Associated Information Overhead activities Overhead costs assigned ($) Number of cost driver Material handling 120,000 240,000 Parts Devising 400,000 50,000 Machine hours (MH) Assembling 168,000 240,000 Parts Finishing 120,000 2,000 Finishing hours (FH) Each refrigerator uses 30 parts and requires 5 machine hours and 1 finishing hour during the production process. The direct material costs and direct labor costs required for each refrigerator is $500 and $90, respectively. What would be the overhead rate for finishing activities? (Round your answer to two decimal points) Group of answer choices $8.00 per FH $0.70 per FH $60.00 per FH $0.50 per FH
Evergreen Inc. expects to manufacture 4,000 refrigerators during the last quarter of the current year. The company uses activity-based costing to determine the product costs. The manufacturing activities and associated information is provided in the table below. Manufacturing Activities and Associated Information Overhead activities Overhead costs assigned ($) Number of cost driver Material handling 120,000 240,000 Parts Devising 400,000 50,000 Machine hours (MH) Assembling 168,000 240,000 Parts Finishing 120,000 2,000 Finishing hours (FH) Each refrigerator uses 30 parts and requires 5 machine hours and 1 finishing hour during the production process. The direct material costs and direct labor costs required for each refrigerator is $500 and $90, respectively. What would be the overhead rate for finishing activities? (Round your answer to two decimal points) Group of answer choices $8.00 per FH $0.70 per FH $60.00 per FH $0.50 per FH
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Evergreen Inc. expects to manufacture 4,000 refrigerators during the last quarter of the current year. The company uses activity-based costing to determine the product costs. The manufacturing activities and associated information is provided in the table below.
Manufacturing Activities and Associated Information| Overhead costs assigned ($) | Number of cost driver | |
|---|---|---|
| Material handling | 120,000 | 240,000 Parts |
| Devising | 400,000 | 50,000 Machine hours (MH) |
| Assembling | 168,000 | 240,000 Parts |
| Finishing | 120,000 | 2,000 Finishing hours (FH) |
Each refrigerator uses 30 parts and requires 5 machine hours and 1 finishing hour during the production process. The direct material costs and direct labor costs required for each refrigerator is $500 and $90, respectively. What would be the overhead rate for finishing activities? (Round your answer to two decimal points)
Group of answer choices
$8.00 per FH
$0.70 per FH
$60.00 per FH
$0.50 per FH
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