Jones Manufacturing Company makes two products. The company s budget includes $430,100 of overhead. In the past, the company allocated overhead based on estimated total direct labor hours of 18,700. Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: processed purchase orders, machine setups, and good shipped. The following is a summary of company information: Estimated Cost Estimated Activities Orders processed $71,260 5,090 orders Machine setups 12,000 480 machine hours Shipping 24,037 55,900 shipments $107,297 Calculate the company s overhead rate based on total direct hours.

Jones Manufacturing Company makes two products. The company s budget includes $430,100 of overhead. In the past, the company allocated overhead based on estimated total direct labor hours of 18,700. Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: processed purchase orders, machine setups, and good shipped. The following is a summary of company information: Estimated Cost Estimated Activities Orders processed $71,260 5,090 orders Machine setups 12,000 480 machine hours Shipping 24,037 55,900 shipments $107,297 Calculate the company s overhead rate based on total direct hours.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 14P: Abbey Products Company is studying the results of applying factory overhead to production. The...

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