ACCT 344 Week 3 Homework

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ACCT 344 Week 3 Homework

1. Question: Alliance Company manufactures two products (brushes and combs). The overhead costs have been divided into four cost pools that use the following activity drivers…………………..

a. Compute the allocation rates for each of the activity drivers listed.

b. Allocate the overhead costs to Products S and T using activity-based costing

c. Compute the overhead rate using machine hours under the functional-based costing system.

d. Allocate the overhead costs to Products S and T using the functional-based costing system overhead rate calculated in part (c).

2. Question: Complete Exercise 4.10 located on page 182 & 183 in the textbook.

Description

ACCT 344 Week 3 Homework,

ACCT 344 Week 3 Homework

1. Question: Alliance Company manufactures two products (brushes and combs). The overhead costs have been divided into four cost pools that use the following activity drivers…………………..

a. Compute the allocation rates for each of the activity drivers listed.

b. Allocate the overhead costs to Products S and T using activity-based costing

c. Compute the overhead rate using machine hours under the functional-based costing system.

d. Allocate the overhead costs to Products S and T using the functional-based costing system overhead rate calculated in part (c).

2. Question: Complete Exercise 4.10 located on page 182 & 183 in the textbook.

 

Solutions”:

Alliance Company manufactures two products (brushes and combs). The overhead costs have been divided into four cost pools that use the following activity drivers.

# of Setups # of Orders Machine Hours Packing Orders
Brushes 30 35 2,000 100
Combs 10 65 6,000 150
Cost per Pool  $20,000  $10,000  $280,000  $60,000

a. Compute the allocation rates for each of the activity drivers listed.
b. Allocate the overhead costs to Products S and T using activity-based costing
c. Compute the overhead rate using machine hours under the functional-based costing system.
d. Allocate the overhead costs to Products S and T using the functional-based costing system overhead rate calculated in part (c).

 

Complete Exercise 4.10 located on page 182 & 183 in the textbook

 

= $285,600/10,200 = $28 per hour B: Applied overhead = Predetermined Overhead Rate * Actual Direct Labor Hours = $28 * 9,930 = $278,040 C: Actual overhead = $285,000 Applied overhead = $278,040 Overhead is Under-Applied by $6,960 D: Total cost = Prime cost + Applied Overhead = $1,050,000 + $278,040 = $1,328,040 Units produced = 150,000 Cost per unit = $1,328,040 ÷ 150,000 = $8.8536

 

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