**Question 4.5**Using activity based costing (ABC), calculate the overhead rate for the following activity: **Design**. That is, what is the overhead rate per hour of design? **NOTE**: Enter only the number of dollars, do not enter the dollar, "$", symbol. Therefore if your answer is "$10", enter only "10".[Input box for answer]---**Question 39**---**Question 4.6**Using activity based costing (ABC), calculate the overhead rate for the following activity: **Installation**. That is, what is the overhead rate per hour of installation to two decimal places? **NOTE**: Enter only the number of dollars, do not enter the dollar, "$", symbol. Therefore if your answer is "$10", enter only "10".[Input box for answer] **Clear Solutions: Activity-Based Costing Analysis**Clear Solutions manufactures and installs standard and custom-designed shop windows. Last year, the company incurred $2,400,000 in overhead costs with a total of 30,000 direct labor hours. After implementing activity-based costing (ABC), the accountant identified the following related information:**Activities and Overhead Allocation:**| Activity | Allocation Base | Proportion of Overhead Cost ||-----------------------------|----------------------------|-----------------------------|| Purchasing | Number of purchase orders | 20% || Material delivery and handling | Number of deliveries | 10% || Design | Hours of design time | 20% || Installation | Hours of installation time | 50% |**Activity Numbers for Windows Production:**| Activity | Standard | Custom ||------------------------------|----------|--------|| Number of purchase orders | 1,000 | 1,400 || Number of deliveries | 200 | 400 || Hours of design time | 200 | 800 || Hours of installation time | 700 | 600 |**Order Analysis:**During the past year, Clear Solutions accepted order no. 159 for one custom window installation, requiring:- Direct labor hours: 20- Number of purchase orders: 3- Number of deliveries: 2- Hours of design time: 5- Hours of installation time: 4This case demonstrates the implementation of activity-based costing to effectively allocate overhead costs based on specific activities, providing more accurate cost assessments for both standard and custom window installs.

Solution 4.5: Budgeted overhead cost of design = $2,400,000*20% = $480,000 Budgeted hours of design…

Using activity based costing (ABC), calculate the overhead rate for the following activity: Design. That is, what is the overhead rate per hour of design? NOTE: Enter only the number of dollars, do not enter the dollar, "$", symbol. Therefore if your answer is "$10", enter only "10".

Using activity based costing (ABC), calculate the overhead rate for the following activity: Design. That is, what is the overhead rate per hour of design? NOTE: Enter only the number of dollars, do not enter the dollar, "$", symbol. Therefore if your answer is "$10", enter only "10".

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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