Sunrise Manufacturing has the following overhead costs and cost drivers. Direct labor hours are estimated at 80,000 for the year. Activity Cost Pool Cost Driver Est. Overhead ($) Cost Driver Activity Material Handling Requisitions Quality Control Inspections 180,000 420,000 600 requisitions 1,400 inspections Production Machine hours 960,000 80,000 MH Packaging Shipping Units Shipments 750,000 250,000 units 390,000 650 shipments If overhead is applied using activity-based costing, the overhead application rate for Quality Control is: A) $5.25 per direct labor hour B) $300 per inspection C) $0.30 per unit D) $3.00 per machine hour

Sunrise Manufacturing has the following overhead costs and cost drivers. Direct labor hours are estimated at 80,000 for the year. Activity Cost Pool Cost Driver Est. Overhead ($) Cost Driver Activity Material Handling Requisitions Quality Control Inspections 180,000 420,000 600 requisitions 1,400 inspections Production Machine hours 960,000 80,000 MH Packaging Shipping Units Shipments 750,000 250,000 units 390,000 650 shipments If overhead is applied using activity-based costing, the overhead application rate for Quality Control is: A) $5.25 per direct labor hour B) $300 per inspection C) $0.30 per unit D) $3.00 per machine hour

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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