Smithson, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: Direct labor costs Machine hours Setup hours Packaging hours Machining Machine set up Packaging Family Model $76,200 2,000 200 The estimated overhead of $457,200 is allocated as follows: machining activity cost pool $243,840, machine set up $172,720 and packaging $40,640. S 50 Determine the overhead rates using the activity-based costing approach with three cost pools. (Round answers to 2 decimal places, eg. 15.25.) $ Deluxe Model $152,400 2,000 800 75 Overhead Rate 60.96 per hour 172.72 per hour 325.12 per hour
Smithson, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: Direct labor costs Machine hours Setup hours Packaging hours Machining Machine set up Packaging Family Model $76,200 2,000 200 The estimated overhead of $457,200 is allocated as follows: machining activity cost pool $243,840, machine set up $172,720 and packaging $40,640. S 50 Determine the overhead rates using the activity-based costing approach with three cost pools. (Round answers to 2 decimal places, eg. 15.25.) $ Deluxe Model $152,400 2,000 800 75 Overhead Rate 60.96 per hour 172.72 per hour 325.12 per hour
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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