Maurice Tutor

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Category > Accounting Posted 18 Aug 2017 My Price 11.00

Poo Inc

Poo Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders.

Model Annual Sales in Units
High F 10,000
Great P 16,000

National uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows:

  High F Great P
Direct materials $38.00 $25.40
Direct labor $17.52 $13.14
Budget factory overhead      
Engineering and Design 2,409 engineering hours $404,712
Quality Control 12,848 inspection hours $269,808
Machinery 33,726 machine hours $539,616
Miscellaneous Overhead 26,400 direct labor hours $134,904
Total     $1,349,040

National's controller had been researching activity-based costing and decided to switch to it. A special study determined National's two products have the following budgeted activities:

  High F Great P
Engineering and design hours 969 1,440
Quality control inspection hours 5,648 7,200
Machine hours 20,286 13,440
Labor hours 12,000 14,400

What is the overhead application rate using the firm's volume-based costing system (rounded to the nearest percent or cents)?  It is expressed as a percent of direct labor cost.

Answers

Maurice Tutor
(5)
Status NEW Posted 18 Aug 2017 05:08 PM My Price 11.00

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