Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory Estimated Overhead Cost $ 19,600 $ 7,000 Expected Activity 10,000 direct labor-hours 7,000 machine-hours 600 setups 500 orders 800 tests $ 23,400 $ 16,500 $ 22,400 $ 62,900 $ 60,000 10,000 direct labor-hours 3,700 packages 2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH
Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory Estimated Overhead Cost $ 19,600 $ 7,000 Expected Activity 10,000 direct labor-hours 7,000 machine-hours 600 setups 500 orders 800 tests $ 23,400 $ 16,500 $ 22,400 $ 62,900 $ 60,000 10,000 direct labor-hours 3,700 packages 2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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[The following information applies to the questions displayed below.]
Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has
the following seven activity cost pools:
Estimated
Overhead Cost
Expected Activity
10,000 direct labor-hours
7,000 machine-hours
600 setups
Activity Cost Pool
Labor-related
$ 19,600
Machine-related
$ 7,000
Machine setups
$ 23,400
Production orders
$ 16,500
500 orders
Product testing
$ 22,400
Packaging
$ 62,900
800 tests
3,700 packages
General factory
$ 60,000
10,000 direct labor-hours
2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined
overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.)
Predetermined overhead rate
per DLH](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F650582c6-bbfa-481e-83cd-d0e98ab2088a%2Ff4a641e3-82ad-41bb-9375-8f9fe3117b22%2Fwdo0fju_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has
the following seven activity cost pools:
Estimated
Overhead Cost
Expected Activity
10,000 direct labor-hours
7,000 machine-hours
600 setups
Activity Cost Pool
Labor-related
$ 19,600
Machine-related
$ 7,000
Machine setups
$ 23,400
Production orders
$ 16,500
500 orders
Product testing
$ 22,400
Packaging
$ 62,900
800 tests
3,700 packages
General factory
$ 60,000
10,000 direct labor-hours
2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined
overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.)
Predetermined overhead rate
per DLH
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