Minecraft Manufacturing has the following overhead costs and cost drivers. Direct labor hours are estimated at 110,000 for the year. Estimated Overhead ($) Cost Driver Activity Activity Cost Pool Cost Driver Ordering and Receiving Orders 135,000 540 orders Machine Setup Setups 310,000 470 setups Machining Machine hours 1,600,000 Assembly Parts Inspection Inspections 1,300,000 320,000 130,000 MH 1,050,000 parts 520 inspections If overhead is applied using activity-based costing, the overhead application rate for Ordering and Receiving is:

Minecraft Manufacturing has the following overhead costs and cost drivers. Direct labor hours are estimated at 110,000 for the year. Estimated Overhead ($) Cost Driver Activity Activity Cost Pool Cost Driver Ordering and Receiving Orders 135,000 540 orders Machine Setup Setups 310,000 470 setups Machining Machine hours 1,600,000 Assembly Parts Inspection Inspections 1,300,000 320,000 130,000 MH 1,050,000 parts 520 inspections If overhead is applied using activity-based costing, the overhead application rate for Ordering and Receiving is:

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1EA: Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor...

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Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
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The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
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