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Your answer is correct. Compute the predetermined overhead rate using traditional costing with machine hours as the basis. (Round answer to 2 decimal places, e.g. 12.25.) (b) Predetermined overhead rate $ eTextbook and Media 9.86 per machine hour Cost per stairway $ Attempts: 1 of 5 used What is the manufacturing cost per stairway under traditional costing? (Round answer to 2 decimal places, e.g. 12.25.)

Your answer is correct. Compute the predetermined overhead rate using traditional costing with machine hours as the basis. (Round answer to 2 decimal places, e.g. 12.25.) (b) Predetermined overhead rate $ eTextbook and Media 9.86 per machine hour Cost per stairway $ Attempts: 1 of 5 used What is the manufacturing cost per stairway under traditional costing? (Round answer to 2 decimal places, e.g. 12.25.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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### Oriole Stairs Co. Cost Analysis #### Overhead Cost Pools for 2025 Oriole Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, handrails) permit the installation of stairways of varying lengths and widths. All are made of white oak wood. Budgeted manufacturing overhead costs for the year 2025 are as follows: | Overhead Cost Pools | Amount | |--------------------------------------------|-----------| | Purchasing | $75,000 | | Handling materials | $82,000 | | Production (cutting, milling, finishing) | $220,000 | | Setting up machines | $105,000 | | Inspecting | $108,000 | | Inventory control (raw materials and finished goods) | $126,000 | | Utilities | $270,000 | | **Total budgeted overhead costs** | **$986,000** | For the last 4 years, Oriole Stairs Co. has been charging overhead to products based on machine hours. For the year 2025, 100,000 machine hours are budgeted. #### Activity-Based Costing Jeremy Nolan, owner-manager of Oriole Stairs Co., recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan’s request, Bill and the production foreman identified the following cost drivers and their usage for the previously budgeted overhead cost pools: | Activity Cost Pools | Cost Drivers | Estimated Use of Cost Drivers | |----------------------------------|-------------------------|--------------------------------| | Purchasing | Number of orders | 600 orders | | Handling materials | Number of moves | 8,000 moves | | Production (cutting, milling, finishing) | Direct labor hours | 100,000 hours | | Setting up machines | Number of setups | 1,250 setups | | Inspecting | Number of inspections | 6,000 inspections | | Inventory control (raw materials and finished goods) | Number of components | 168,000 components | | Utilities | Square feet occupied | 90,000 square feet | #### Cost Estimation for Community Builders, Inc. Steve Hannon, sales manager, has received an order
Transcribed Image Text:### Oriole Stairs Co. Cost Analysis #### Overhead Cost Pools for 2025 Oriole Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, handrails) permit the installation of stairways of varying lengths and widths. All are made of white oak wood. Budgeted manufacturing overhead costs for the year 2025 are as follows: | Overhead Cost Pools | Amount | |--------------------------------------------|-----------| | Purchasing | $75,000 | | Handling materials | $82,000 | | Production (cutting, milling, finishing) | $220,000 | | Setting up machines | $105,000 | | Inspecting | $108,000 | | Inventory control (raw materials and finished goods) | $126,000 | | Utilities | $270,000 | | **Total budgeted overhead costs** | **$986,000** | For the last 4 years, Oriole Stairs Co. has been charging overhead to products based on machine hours. For the year 2025, 100,000 machine hours are budgeted. #### Activity-Based Costing Jeremy Nolan, owner-manager of Oriole Stairs Co., recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan’s request, Bill and the production foreman identified the following cost drivers and their usage for the previously budgeted overhead cost pools: | Activity Cost Pools | Cost Drivers | Estimated Use of Cost Drivers | |----------------------------------|-------------------------|--------------------------------| | Purchasing | Number of orders | 600 orders | | Handling materials | Number of moves | 8,000 moves | | Production (cutting, milling, finishing) | Direct labor hours | 100,000 hours | | Setting up machines | Number of setups | 1,250 setups | | Inspecting | Number of inspections | 6,000 inspections | | Inventory control (raw materials and finished goods) | Number of components | 168,000 components | | Utilities | Square feet occupied | 90,000 square feet | #### Cost Estimation for Community Builders, Inc. Steve Hannon, sales manager, has received an order
### Predetermined Overhead Rate Calculation #### Compute the Predetermined Overhead Rate To compute the predetermined overhead rate using traditional costing with machine hours as the basis, follow the instructions below. Note that the answer should be rounded to 2 decimal places (e.g., 12.25). **Predetermined Overhead Rate:** \[ \text{Predetermined Overhead Rate} = \$9.86 \text{ per machine hour} \] ✔️ Your answer is correct. --- ### Manufacturing Cost Per Stairway #### (b) Traditional Costing Calculate the manufacturing cost per stairway under traditional costing. The answer should be rounded to 2 decimal places (e.g., 12.25). **Cost per Stairway:** \[ \text{Cost per Stairway} = \$ \text{ } \] --- #### Additional Attempts Users can attempt to calculate these values up to 5 times. **Current Attempts:** - Attempts used: 1 of 5 For more detailed explanations and theories, refer to the eTextbook and Media provided.
Transcribed Image Text:### Predetermined Overhead Rate Calculation #### Compute the Predetermined Overhead Rate To compute the predetermined overhead rate using traditional costing with machine hours as the basis, follow the instructions below. Note that the answer should be rounded to 2 decimal places (e.g., 12.25). **Predetermined Overhead Rate:** \[ \text{Predetermined Overhead Rate} = \$9.86 \text{ per machine hour} \] ✔️ Your answer is correct. --- ### Manufacturing Cost Per Stairway #### (b) Traditional Costing Calculate the manufacturing cost per stairway under traditional costing. The answer should be rounded to 2 decimal places (e.g., 12.25). **Cost per Stairway:** \[ \text{Cost per Stairway} = \$ \text{ } \] --- #### Additional Attempts Users can attempt to calculate these values up to 5 times. **Current Attempts:** - Attempts used: 1 of 5 For more detailed explanations and theories, refer to the eTextbook and Media provided.
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