PROBLEM 4-3a

# PROBLEM 4-3a - PROBLEM 4-3A(a Predetermined overhead rate using machine hours \$830,000 100,000 hrs = \$8.30 per machine hour(b Manufacturing cost

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PROBLEM 4-3A (a) Predetermined overhead rate using machine hours: \$830,000 ÷ 100,000 hrs. = \$8.30 per machine hour (b) Manufacturing cost per stair under traditional costing: Direct materials. ................................................................ \$103,600 Direct labor. ....................................................................... 112,000 Overhead (14,500 X \$8.30). .............................................. 120,350 Total cost of 280 stairs. ............................................ \$335,950 Cost per stair (\$335,950 ÷ 280). ....................................... \$1,199.82 (c) Manufacturing cost per stair under activity-based costing: Computation of Activity-Based Overhead Rate Activity Cost Pools Estimated Overhead ÷ Expected Use of Cost Drivers per Activity = Activity-Based Overhead Rate Purchasing Handling materials Production Setting up machines Inspecting Inventory control Utilities \$ 57,000 82,000 210,000 85,000 90,000 126,000 180,000 \$830,000 600 Orders 8,000 Moves

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## This note was uploaded on 05/16/2011 for the course AC 303 taught by Professor Richardkido during the Spring '11 term at Chaminade University.

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PROBLEM 4-3a - PROBLEM 4-3A(a Predetermined overhead rate using machine hours \$830,000 100,000 hrs = \$8.30 per machine hour(b Manufacturing cost

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