Vaughn Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100000 for the year. The following information is available regarding activity cost pools, cost drivers, total estimated overhead costs, and estimated use of activities per product: Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection > Cost Driver Orders Setups Machine hours Parts Inspections. Est. Overhead $ 105000 338500 O $7014 per order. O $1.05 per direct labor hour. O $210 per order. O $0.11 per part. 1433500 1300000 330000 Cost Driver Activity 500 orders 450 setups 125000 MH 1000000 parts If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is 500 inspections
Vaughn Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100000 for the year. The following information is available regarding activity cost pools, cost drivers, total estimated overhead costs, and estimated use of activities per product: Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection > Cost Driver Orders Setups Machine hours Parts Inspections. Est. Overhead $ 105000 338500 O $7014 per order. O $1.05 per direct labor hour. O $210 per order. O $0.11 per part. 1433500 1300000 330000 Cost Driver Activity 500 orders 450 setups 125000 MH 1000000 parts If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is 500 inspections
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CMA: Cynthia Rogers, the cost accountant for Sanford Manufacturing, is preparing a management report that...
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