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Determine Machine Hour Cost and Overhead Cost: Three Cost Po

1. OTA company manufactures two products (X and Y). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers:
Product X: 10 Setups, 500 Machine Hours and 75 Packing Orders
Product Y: 10 Setups, 2,000 Machine Hours and 175 Packing Orders
Cost Per Pool: $9,000 Setups, $60,000 Machine Hours and $15,000 Packing Orders

If the number of machine hours is used to assign machine hour cost, determine the amount of machine hour cost to be assigned to Product X.
A) 12,000. B)60,000 C)48,000 D)16,800

2. OTA Manufacturing Company manufactures two products (X and Y). The overhead costs ($58,000) have been divided into three cost pools that use the following activity drivers:
Product X: 15 Orders, 50 Labor Transactions and 500 Labor Hours
Product Y: 10 Orders, 150 Labor Transactions and 2,000 Labor Hours
Cost Per Pool: $10,000 Orders, $8,000 Labor Transactions, and $40,000 Labor Hours

If the number of labor hours is used to assign labor costs from the cost pool, determine the amount of overhead cost to be assigned from Product X.
A) 58,000 B)8,000 C) 9,600 D)32,000.

Solution Preview

1. OTA company manufactures two products (X and Y). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers:

Product X: 10 Setups, 500 Machine Hours and 75 Packing Orders
Product Y: 10 Setups, 2,000 Machine Hours and 175 Packing Orders
Cost Per Pool: $9,000 Setups, $60,000 ...

Solution Summary

This solution is comprised of a detailed explanation to determine the amount of machine hour cost to be assigned to Product X.

$2.19