When Jasmine realized how small the margin was for her main product, she was aghast. She knew the company had already achieved significant direct materials savings by partnering with its supplier. The consultant brought in last year further streamlined labor usage, bringing her to best-in-class levels for labor. The only other area to look at was overhead. Total MOH costs this coming year are estimated at $2,100,000. Three key activities are the primary causes of total MOH. They are identified as follows, including the budgeted cost, budgeted cost driver, and budgeted cost driver quantities for each. Activity Cutting Fabrication Inspection Total (a) Budgeted Cost $600,000 1,200,000 300,000 $2,100,000 Budgeted Quantity of Cost Driver 60,000 machine hours 120,000 direct labor hours 20,000 inspection hours Main Product's Use of Cost Driver Total allocated MOH for the main product $ 8,000 20,000 2,000 Assuming the company uses one plant-wide rate based on DL hours to allocate MOH, calculate that rate and determine total allocated MOH for the main product. (Round plant-wide rate to 2 decimal places, e.g. 15.25 and final answer to 0 decimal places, e.g. 5,125.)

When Jasmine realized how small the margin was for her main product, she was aghast. She knew the company had already achieved significant direct materials savings by partnering with its supplier. The consultant brought in last year further streamlined labor usage, bringing her to best-in-class levels for labor. The only other area to look at was overhead. Total MOH costs this coming year are estimated at $2,100,000. Three key activities are the primary causes of total MOH. They are identified as follows, including the budgeted cost, budgeted cost driver, and budgeted cost driver quantities for each. Activity Cutting Fabrication Inspection Total (a) Budgeted Cost $600,000 1,200,000 300,000 $2,100,000 Budgeted Quantity of Cost Driver 60,000 machine hours 120,000 direct labor hours 20,000 inspection hours Main Product's Use of Cost Driver Total allocated MOH for the main product $ 8,000 20,000 2,000 Assuming the company uses one plant-wide rate based on DL hours to allocate MOH, calculate that rate and determine total allocated MOH for the main product. (Round plant-wide rate to 2 decimal places, e.g. 15.25 and final answer to 0 decimal places, e.g. 5,125.)

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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