Bonita, Inc. produces two types of gas grills: a family model and a deluxe model. Bonita's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently 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: Direct labor costs Machine hours Setup hours Family Model $76,800 2,000 (a) 200 Deluxe Model $153,600 Overhead rate $ 2,000 Total estimated overhead costs are $460,800. Overhead cost allocated to the machining activity cost pool is $276,480 and $184,320 is allocated to the machine setup activity cost pool. 800 Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 15.25.)

Bonita, Inc. produces two types of gas grills: a family model and a deluxe model. Bonita's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently 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: Direct labor costs Machine hours Setup hours Family Model $76,800 2,000 (a) 200 Deluxe Model $153,600 Overhead rate $ 2,000 Total estimated overhead costs are $460,800. Overhead cost allocated to the machining activity cost pool is $276,480 and $184,320 is allocated to the machine setup activity cost pool. 800 Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 15.25.)

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Description: Bonita, Inc. produces two types of gas grills: a family model and a deluxe model. Bonita's controller has decided to use a plantwideoverhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...

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Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC: What would be the predetermined rate for each cost pool?
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