Question

Search AutoSave OP H File Home U B Insert Page Layout ExcelTemplateAssignment_ChO4 (5) - Excel Formulas Data Review View Help DYMO Label QuickBooks A1 1 X fo E4-9 Compute overhead rates and assign overhead using ABC LA B C D E F G H I K LL 1 E4-9 Compute overhead rates and assign overhead using ABC 2 Alr United, Inc, manufactures two products: missile range Instruments and space pressure gaugos. During April 3 50 range Instruments and 300 pressure gauges were produced, and overhead costs of $94,500 were estimated. An 4 analysis of estimated overhead costs reveals the following activities, Activities 1. Materials handling 2. Machine setups 3. Quality inspections Cost Drivers Number of requisitions Number of setups Number of inspections Total Cost $40,000 21,500 33,000 $94,500 12 The cost driver volume for each product was as follows. 17 Cost Drivers Instruments Gauges Total Number of requisitions 400 600 1,000 Number of setups 200 300 500 Number of Inspections 200 400 600 18 19 Instructions 20 (a) Determine the overhead rate for each activity 216) Assign the manufacturing overhead costs for April to the two products using activity-based costing. 22 and compute the overhead cost per unit. 23(e) Write a memorandum to the president of Air United explaining the benofts of activity-based costing. 24 25 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?". 29 (a) 30 32 Activity-Based OK Rates The overhead rates are: Expected Use Estimated + of Cost Driver Activity Cost Pools Overhead Activity Materials Handling Value Value Machine Setups Value Quality Inspections Value Value TEBE44E49 PIA PARA COLO Value requisition solup Inspection

Answer 1

Subject Date (1) Ouer head rate for each cebuity Material houndling - $40000 - $40 1000 Machine sehp quality inspection. $215VD, $43. $33000 - $55 500 60 21 Alsignment of cost - Inehiments : Number lost. Requisition 400 $16000 (& Yoox140) Machine sehy. 200 $8600 800 x $43) Inspection. 200. $1.000 (200 $55) $35200 Per unit owerhead cost $35600/50 $712 - Gauges Wumber Cost Requisition 600 & 4000 (650x840) Machine sehip 300 $12900 (320X843) Inspection you $22000 (you 855) $58900 per unt overhead costa $58900/300 - $196.33