Assignment 1

Topics: Cost accounting, Cost, Costs Pages: 2 (256 words) Published: December 6, 2014
(A)Compute the predetermined overhead rate using traditional costing with materials cost as the basis? _ Solution:
Predetermine overhead rate:

Total budgeted overhead costs
O/H rate = (Budgeted = Estimated) Materials cost budgeted (BASIS)

550,000
= = 1.1 % 500,000

……………………………………………………………………………………………………………….. (B) What is the manufacturing cost per armoire under traditional costing? _Solution:
Manufacturing cost overhead.
Direct materials $5,200
Direct labor $3,500
Manufac. Overhead $1.1
---------- Manufacturing cost $8,701.1
---------- ………………………………………………………………………………………………………………… (C) What is the manufacturing cost per armoire under activity based costing? _Solution:

1)
Overhead cost pools Amount Activity cost Drivers Expected use of costs drives Purchasing $ 45,000 Number of orders 500 Handling materials 50,000 Number of moves 5,000 Production 130,000 Direct labor hours 65,000 Setting up machines...
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