Honeywell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection Cost Driver Orders Setups Machine hours Parts Inspections Estimated Overhead Cost Driver Activity $21,500 500 orders $31,100 450 setups $46,500 125,000 hours $51,600 1,000,000 parts $35,400 500 inspections Overhead is applied using traditional costing based on direct labor hours. What is the overhead application rate? $0.22 O $1.34 $1.86 $0.47
Honeywell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection Cost Driver Orders Setups Machine hours Parts Inspections Estimated Overhead Cost Driver Activity $21,500 500 orders $31,100 450 setups $46,500 125,000 hours $51,600 1,000,000 parts $35,400 500 inspections Overhead is applied using traditional costing based on direct labor hours. What is the overhead application rate? $0.22 O $1.34 $1.86 $0.47
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![Honeywell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year.
Activity Cost Pool
Ordering and Receiving
Machine Setup
Machining
Assembly
Inspection
$0.22
Cost Driver
Orders
Setups
Machine hours
$1.34
$1.86
$0.47
Parts
Inspections
Estimated Overhead
$21,500
$31,100
$46,500
$51,600
$35,400
Cost Driver Activity.
500 orders
450 setups
125,000 hours
1,000,000 parts
Overhead is applied using traditional costing based on direct labor hours. What is the overhead application rate?
500 inspections
45](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F59d6f0c8-1bac-4295-afba-7c77fa0e0ffa%2Fa646f093-d926-4fde-a096-df30368a153e%2Fol67ws_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Honeywell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year.
Activity Cost Pool
Ordering and Receiving
Machine Setup
Machining
Assembly
Inspection
$0.22
Cost Driver
Orders
Setups
Machine hours
$1.34
$1.86
$0.47
Parts
Inspections
Estimated Overhead
$21,500
$31,100
$46,500
$51,600
$35,400
Cost Driver Activity.
500 orders
450 setups
125,000 hours
1,000,000 parts
Overhead is applied using traditional costing based on direct labor hours. What is the overhead application rate?
500 inspections
45
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