Question

Coopers Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers. Cooper's Bags Company sells the bags in cases of 1,900 bags. The bags come in three sizes: Large, Medium, and Small. Currently, Coopers Bags Company uses a single plantwide overhead rate to allocate its $7,293,000 of annual manufacturing overhead. Of this amount, $2,200,000 is associated with the Large Bag line, $3,415,000 is associated with the Medium Bag line, and $1,678,000 is associated with the Smal Bag line. Coopers Bags Company is currently running a total of 44,000 machine hours: 13,100 in the Large Bag line, 15,200 in the Medium Bag line, and 15,700 in the Small Bag line. Cooper's Bags Company uses machine hours as the cost a for marnufacturing overhead costs The departmental manufactuning overhead rate for the Small Bag line would be closest to (Round your final answer to the nearest cent) OA. $106 88 per machine hour O B. $165.75 per machine hour C. $167 94 per machine hour O D. $22467 per machine hour

Answer 1

Answer

B ) 165.75 per machine hour

computation of manufacturing overhead rate

= annual manufacturing overhead / annual machine hours

= 7293000 / 44000

= 165.75