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Required: 1. Calculate the overhead assigned to the leather case line using the traditional costing system based on direct labor hours. (Do n round intermediate calculations.) Overhead Assigned 2. Calculate the overhead assigned to the leather case line using ABC.

Required: 1. Calculate the overhead assigned to the leather case line using the traditional costing system based on direct labor hours. (Do n round intermediate calculations.) Overhead Assigned 2. Calculate the overhead assigned to the leather case line using ABC.

FINANCIAL ACCOUNTING
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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Required: 1. Calculate the overhead assigned to the leather case line using the traditional costing system based on direct labor hours. (Do not round intermediate calculations.) Overhead Assigned 2. Calculate the overhead assigned to the leather case line using ABC. Overhead Assigned
Transcribed Image Text:Required: 1. Calculate the overhead assigned to the leather case line using the traditional costing system based on direct labor hours. (Do not round intermediate calculations.) Overhead Assigned 2. Calculate the overhead assigned to the leather case line using ABC. Overhead Assigned
Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case Leather Case 18,000 12,000 765 57 935 133 Total estimated overhead costs are $243,900, of which $204,000 is assigned to the materials handling cost pool and $39,900 is assigned to the setup cost pool.
Transcribed Image Text:Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case Leather Case 18,000 12,000 765 57 935 133 Total estimated overhead costs are $243,900, of which $204,000 is assigned to the materials handling cost pool and $39,900 is assigned to the setup cost pool.
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