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In: Accounting

Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso’s total overhead costs consist of assembly costs...

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

Solutions

Expert Solution

the Single overhead rate is calculated as:

Indirect costs ÷ Direct labor = Overhead rate.

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