# AC 54 - pool(a CompuTe The overhead raTe using The...

This preview shows pages 1–2. Sign up to view the full content.

Question: Exercise 17-1 Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plant wide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations. Standard Custom Direct labor costs \$53,000 \$108,000 Machine hours 1,190 1,500 Setup hours 110 440 Total estimated overhead costs are \$308,800. Overhead cost allocated to the machining activity cost pool is \$196,400, and \$112,400 is allocated to the machine setup activity cost

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: pool. (a) CompuTe The overhead raTe using The Traditonal (planT wide) approach. (Round answers To 2 decimal places, e.g. 12.25%.) PredeTermined overhead raTe % of direcT labor cosT Answer: a) Predetermined overhead rate based on direct labor costs = Overhead / Direct labor costs = \$308,800 / (\$53,000 + \$108,000) = 191.80% of Direct labor costs. Queston: Answer: Date Inventory at base year cost Inventory layers Year of layer Inventory at added year cost Inventory (Dollar Value LIFO) 12/31/2014 \$ 20,200.00 \$ 19,500.00 Base layer \$ 19,500.00 \$ 700.00 2013 \$ 735.00 \$ 20,235.00 12/31/2015 \$ 22,400.00 \$ 19,500.00 \$ 19,500.00 \$ 700.00 \$ 735.00 \$ 2,200.00 \$ 2,486.00 \$ 22,721.00...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern