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    Overhead Applied: Traditional & Activity-Based Costing

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    Jasper Co. manufacturers two products, A & B. Jasper Co.'s overhead costs consist of setting up machines, $800,000; machining, $1,800,000, and inspecting, $600,000. See more info below about the products:
    A. B.
    Direct labor hours 15,000 25,000
    Machine setups 600 400
    Machine hours 24,000 26,000
    Inspections 800 700

    Q1. How much overhead is applied to A using traditional cost using direct labor hours?
    Q2. How much overhead is applied to B using activity-based costing?

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    Solution Preview

    Setting Up Machines - $800,000

    Machining - $1,800,000

    Inspecting - $600,000

    Total = $3,200,000

    Q1. How much ...

    Solution Summary

    This solution provides calculations for the amount of overhead applied to situations regarding traditional and activity-based costing.