Spud, Inc. a manufacturer of gourmet potato chips, employs activity-based costing. The budgeted data for each of the activity cost pools is provided below for the year 2020. Activity Cost Pools Estimated Overhead Estimated Use of Cost Drivers per Activity Ordering and receiving$94,72012,800 orders Food processing 492,00060,000 machine hours Packaging 1,695,450445,000 labor hours For 2020, the company had 11,800 orders and used 51,100 machine hours, and labor hours totaled 497,000.
Calculate the overhead rates for each activity. (Round answers to 2 decimal places, e. g. 12.25.)
Overhead Rates
Ordering and receiving
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per order
Food processing
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per machine hour
Packaging
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per labor hour
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Spud, Inc. a manufacturer of gourmet potato chips,
Spud, Inc. a manufacturer of gourmet potato chips,
What is the total overhead applied?
Total overhead applied
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Digger Inc. sells a high-speed retrieval system for mining information. It provides the following information for the year.
Budgeted
Actual
Overhead cost $975,000 $950,000
Machine hours 50,000 45,000
Direct labor hours 100,000 92,000
Overhead is applied on the basis of direct labor hours.
Spud, Inc. a manufacturer of gourmet potato chips,
Spud, Inc. a manufacturer of gourmet potato chips,
Compute the predetermined overhead rate. (Round answer to 2 decimal places, e. g. 12.25.)
Predetermined overhead rate
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per direct labor hour
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Spud, Inc. a manufacturer of gourmet potato chips,
Spud, Inc. a manufacturer of gourmet potato chips,
Determine the amount of overhead applied for the year.
Amount of overhead applied
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Morgana Company identifies three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $150,000, $375,000, and $87,500, respectively. The cost driver for each activity and the expected annual usage are number of setups 2,500, machine hours 25,000, and number of inspections 1,750.
Compute the overhead rate for each activity.
Machine setups
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per setup
Machining
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per machine hour
Inspections
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per inspection