Company A has identified three cost pools to allocate overhe
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Company A has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
Cost Pool Overhead Costs Cost driver Activity level
Supervision of direct labor $320,000 Direct labor-hours 800,000
Machine maintenance $120,000 Machine-hours 960,000
Facility rent $200,000 Square feet of area 100,000
Total overhead costs $640,000
The accounting records show the Product A Job consumed the following resources:
Cost driver Actual level
Direct labor-hours 200
Machine-hours 1,600
Square feet of area 50
? If direct labor-hours are considered as the only overhead cost driver, what is the single cost driver rate for Company A?
? Using direct labor-hours as the only overhead cost driver, what is the amount of overhead costs allocated to the Product A Job?
? If Company A uses the three activity cost pools to allocate overhead costs, what are the activity-cost driver rates for supervision of direct labor, machine maintenance, and facility rent, respectively?
? Using the three cost pools to allocate overhead costs, what is the total amount of overhead costs to be allocated to the Product A Job?
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Solution Summary
This solution is comprised of a detailed explanation to calculate what is the single cost driver rate for Company A, the amount of overhead costs allocated to the Product A Job, the activity-cost driver rates for supervision of direct labor, machine maintenance, and facility rent, respectively, and the total amount of overhead costs to be allocated to the Product A Job.
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Company A has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
Cost Pool Overhead Costs Cost driver Activity level
Supervision of direct labor $320,000 Direct labor-hours 800,000
Machine maintenance $120,000 Machine-hours 960,000
Facility rent $200,000 Square feet of area 100,000
Total overhead costs $640,000
The accounting records show the ProductA Job consumed the following ...
Purchase this Solution
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