Milan Manufacturing Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool Supervision of direct labor Machine maintenance Facility rent Total overhead costs Cost driver Activity level 920,000 Overhead Costs $794,000 Direct labor-hours $140,000 Machine-hours 1,040,000 $216,000 $1,150,000 Square feet of area 130,000 The accounting records show the Mossman Job consumed the following resources: Cost driver Actual level Direct labor-hours 230 Machine-hours 1,547 Square feet of area 50 OA. $0.86 per direct labor-hour OB. $0.80 per direct labor-hour OC. $1.16 per direct labor-hour OD. $1.25 per direct labor - hour

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Milan Manufacturing Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
Cost Pool
Supervision of direct labor
Machine maintenance
Facility rent
Total overhead costs
Cost driver
Activity level
920,000
Overhead Costs
$794,000
Direct labor-hours
$140,000
Machine-hours
1,040,000
$216,000
$1,150,000
Square feet of area
130,000
The accounting records show the Mossman Job consumed the following resources:
Cost driver
Actual level
Direct labor-hours
230
Machine-hours
1,547
Square feet of area
50
OA. $0.86 per direct labor-hour
OB. $0.80 per direct labor-hour
OC. $1.16 per direct labor-hour
OD. $1.25 per direct labor - hour
Transcribed Image Text:Milan Manufacturing Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool Supervision of direct labor Machine maintenance Facility rent Total overhead costs Cost driver Activity level 920,000 Overhead Costs $794,000 Direct labor-hours $140,000 Machine-hours 1,040,000 $216,000 $1,150,000 Square feet of area 130,000 The accounting records show the Mossman Job consumed the following resources: Cost driver Actual level Direct labor-hours 230 Machine-hours 1,547 Square feet of area 50 OA. $0.86 per direct labor-hour OB. $0.80 per direct labor-hour OC. $1.16 per direct labor-hour OD. $1.25 per direct labor - hour
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