In: Accounting
Reynoso Corporation manufactures titanium and aluminum tennis
racquets. Reynoso’s total overhead costs consist of assembly costs
and inspection costs. The following information is
available:
Cost | Titanium | Aluminum | Total Cost |
Assembly | 500 mach. hours | 500 mach. hours | $54000 |
Inspections | 350 | 150 | $94000 |
2100 labor hours | 1900 labor hours |
Reynoso is considering switching from one overhead rate based on
labor hours to activity-based costing.
Total overhead costs assigned to titanium racquets, using a single
overhead rate, are
the Single overhead rate is calculated as:
Indirect costs ÷ Direct labor = Overhead rate.
The answer is Solve as per given question.
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