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Required: a. Upriver currently applies overhead on the basis of machine hours. What is the predetermined overhead rate for the month? (Round your answer to 2 decimal places.) b. Upriver is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine hours for machine depreciation, production runs for setup labor, and direct material dollars for material handling. Compute the cost driver rates for the proposed system at Upriver. a. Overhead rate per machine hour b. Machine depreciation per machine hour Setup labor Material handling per production run % direct material cost

Required: a. Upriver currently applies overhead on the basis of machine hours. What is the predetermined overhead rate for the month? (Round your answer to 2 decimal places.) b. Upriver is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine hours for machine depreciation, production runs for setup labor, and direct material dollars for material handling. Compute the cost driver rates for the proposed system at Upriver. a. Overhead rate per machine hour b. Machine depreciation per machine hour Setup labor Material handling per production run % direct material cost

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required: a. Upriver currently applies overhead on the basis of machine hours. What is the predetermined overhead rate for the month? (Round your answer to 2 decimal places.) b. Upriver is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine hours for machine depreciation, production runs for setup labor, and direct material dollars for material handling. Compute the cost driver rates for the proposed system at Upriver. а. Overhead rate per machine hour b. Machine depreciation per machine hour Setup labor per production run Material handling % direct material cost
Transcribed Image Text:Required: a. Upriver currently applies overhead on the basis of machine hours. What is the predetermined overhead rate for the month? (Round your answer to 2 decimal places.) b. Upriver is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine hours for machine depreciation, production runs for setup labor, and direct material dollars for material handling. Compute the cost driver rates for the proposed system at Upriver. а. Overhead rate per machine hour b. Machine depreciation per machine hour Setup labor per production run Material handling % direct material cost
Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow. V-1 V-2 Units produced Direct materials cost per unit Machine hours per unit Production runs per month 1,000 $ 1 10,000 $ 4 80 40 Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow. Machine depreciation Setup labor Material handling $36,000 18,000 14,400 $68,400 Total
Transcribed Image Text:Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow. V-1 V-2 Units produced Direct materials cost per unit Machine hours per unit Production runs per month 1,000 $ 1 10,000 $ 4 80 40 Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow. Machine depreciation Setup labor Material handling $36,000 18,000 14,400 $68,400 Total
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