Jones Manufacturing Company makes two products. The company s budget includes $430,100 of overhead. In the past, the company allocated overhead based on estimated total direct labor hours of 18,700. Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: processed purchase orders, machine setups, and good shipped. The following is a summary of company information: Estimated Cost Estimated Activities Orders processed $71,260 5,090 orders Machine setups 12,000 480 machine hours Shipping 24,037 55,900 shipments $107,297 Calculate the company s overhead rate based on total direct hours.
Jones Manufacturing Company makes two products. The company s budget includes $430,100 of overhead. In the past, the company allocated overhead based on estimated total direct labor hours of 18,700. Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: processed purchase orders, machine setups, and good shipped. The following is a summary of company information: Estimated Cost Estimated Activities Orders processed $71,260 5,090 orders Machine setups 12,000 480 machine hours Shipping 24,037 55,900 shipments $107,297 Calculate the company s overhead rate based on total direct hours.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 3CE: Lansing. Inc., provided the following data for its two producing departments: Machine hours are used...
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Hi expart Provide answer the general accounting question not use

Transcribed Image Text:Jones Manufacturing Company makes two products. The company s
budget includes $430,100 of overhead. In the past, the company
allocated overhead based on estimated total direct labor hours of
18,700. Jones recently implemented an activity-based costing system
and had determined that overhead can be broken into three overhead
pools: processed purchase orders, machine setups, and good
shipped. The following is a summary of company information:
Estimated Cost Estimated Activities
Orders processed $71,260
5,090 orders
Machine setups
12,000
480 machine hours
Shipping
24,037
55,900 shipments
$107,297
Calculate the company s overhead rate based on total direct hours.
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