Question

In: Accounting

a. A company manufactures small and large blankets. It estimates $324,000 in overhead during the manufacturing...

a. A company manufactures small and large blankets. It estimates $324,000 in overhead during the manufacturing of 72,000 small blankets and 24,000 large blankets. What is the predetermined overhead rate if a small blanket takes 1 machine hour and a large blanket takes 2 machine hours?

b. They make two types of blankets: polyester (poly) and silk. There are two cost pools: setup, with an estimated $100,000 in overhead, and inspection, with $25,000 in overhead. Poly is estimated to have 750,000 setups and 150,000 inspections, while silk has 260,000 setups and 70,000 inspections. How much overhead is applied to each product?

Activity Rate Applied
to Poly		 Applied
to Silk
Setup $0.08 $ $
Inspection 0.08
Total $ $

c.

Estimated Activity
Activity Center Product 1 Product 2 Estimated Cost
Machine Setups 15 45 $10,800
Assembly Parts 4,500 4,500 215,100
Packaging Pieces 500 400 55,800
Machine Hours per Unit 4 3
Production Volume 750 1,500

A. How much overhead would be allocated to each unit under the traditional allocation method? Round your answers to two decimal places.

Product 1 Product 2
Allocation per unit $ $

B. How much overhead would be allocated to each unit under activity-based costing? Round your answers to two decimal places.

Product 1 Product 2
Allocation per unit $ $

Solutions

Expert Solution

The answer has been presenetd in the supporting sheet. For detailed answer refer to the supporting sheet. For detaield answer refer to the supporitng sheet.

ekkarill92 answered 2 years ago
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