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Category > Accounting Posted 31 May 2017 My Price 5.00

Computing overhead rates based on different cost drivers

Computing overhead rates based on different cost drivers

Roebuck Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows.

 

 

Repair and maintenance on assembly machine

$ 50,000

Number of units produced

Programming cost

84,000

Number of programming hours

Software inspections

6,000

Number of inspections

Product testing

8,000

Number of tests

Total overhead cost

$148,000

  

Expected activity for each product follows.

 

 

 

Numberof Units

Number ofProgrammingHours

 

Number ofInspections

 

Numberof Tests

Decoder P

20,000

2,000

190

1,400

Decoder Q

30,000

1,500

60

1,100

Total

50,000

3,500

250

2,500

 

Required

  1. Compute the overhead rate for each activity pool.

  2. Determine the overhead cost allocated to each product.

Answers

Alpha Geek
(8)
Status NEW Posted 31 May 2017 08:05 AM My Price 5.00

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file 1496220032-Answer.docx preview (152 words )
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