Cost Pools Machine Setup Inspection Estimated Overhead $741,600 $302,400 Cost Driver Number of Setups Number of Inspections Expected Use of Drivers 10,000 setups 12,600 inspections Usage by Drills 5,600 6,800 Answer the following questions based on the data above: 1. Compute the single traditional overhead rate. 2. How much overhead is applied to Drills using the single overhead rate? 3. How much overhead is applied to Saws using the single overhead rate? 4. Compute the overhead rates for the Machine Setup cost pool using ABC. 5. Compute the overhead rates for the Inspection cost pool using ABC. 6. How much overheads is applied to Drills using ABC rates? 7. How much overhead is applied to Saws using ABC rates? Usage by Saws 4,400 5,800

Cost Pools Machine Setup Inspection Estimated Overhead $741,600 $302,400 Cost Driver Number of Setups Number of Inspections Expected Use of Drivers 10,000 setups 12,600 inspections Usage by Drills 5,600 6,800 Answer the following questions based on the data above: 1. Compute the single traditional overhead rate. 2. How much overhead is applied to Drills using the single overhead rate? 3. How much overhead is applied to Saws using the single overhead rate? 4. Compute the overhead rates for the Machine Setup cost pool using ABC. 5. Compute the overhead rates for the Inspection cost pool using ABC. 6. How much overheads is applied to Drills using ABC rates? 7. How much overhead is applied to Saws using ABC rates? Usage by Saws 4,400 5,800

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 11MC: Which is not a task typically associated with ABC systems? A. calculating the overhead application...

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Rex Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Compute the overhead rate for each activity.
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