Pharoah Industries has three activity cost pools and two products. It expects to produce 2,800 units of Product SZ09 and 1,300 ofProduct NZ16. Having identified its activity cost pools and the cost drivers for each pool, Pharoah accumulated the following datarelative to those activity cost pools and cost drivers.Activity Cost PoolMachine set-upsAssemblingInspectionMachine set-upsCalculate the overhead rates.AssemblingInspectionSZ09 $Cost DriverSet-upsMachine hoursNZ16 $InspectionsGALA$LAAssign the overhead cost to the two products.taEstimatedOverhead$63,600354,0006,160Estimated Useof Cost Driversper set-up20017,700per inspection110per machine hourSZ09130NZ16607010,300 7,40050

Overhead cost to be allocated on each product by way of Total overhead cost / Estimated use of Cost…

Answered: oduct NZ16. Ha lative to those a…

Business

Accounting

oduct NZ16. Ha lative to those a Activity Cost Po Machine set-ups Assembling nspection

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Pharoah Industries has three activity cost pools and two products. It expects to produce 2,800 units of Product SZ09 and 1,300 of
Product NZ16. Having identified its activity cost pools and the cost drivers for each pool, Pharoah accumulated the following data
relative to those activity cost pools and cost drivers.
Activity Cost Pool
Machine set-ups
Assembling
Inspection
Machine set-ups
Calculate the overhead rates.
Assembling
Inspection
SZ09 $
Cost Driver
Set-ups
Machine hours
NZ16 $
Inspections
GA
LA
$
LA
Assign the overhead cost to the two products.
ta
Estimated
Overhead
$63,600
354,000
6,160
Estimated Use
of Cost Drivers
per set-up
200
17,700
per inspection
110
per machine hour
SZ09
130
NZ16
60
70
10,300 7,400
50

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