Cat Boards is a local company that produces standard and specialty snowboards. Sebastian, the founder...
90.2K
Verified Solution
Link Copied!
Question
Accounting
Cat Boards is a local company that produces standard and specialty snowboards. Sebastian, the founder and owner of Cat Boards, has designed the production process around three main stages; planking (where layers of plastic, fiberglass, and resin are layered around a wooden frame), cutting (where the board is cut to specs), and pressing (where the entire assembly is inserted in a press to harden into the desired shape). Currently Cat Boards is using a plant-wide overhead rate based on direct labor hours to allocate overhead. But, management feels that this approach distorts production costs and has asked you for help. The company currently produces 600 standard boards and 200 specialty boards. A standard board takes 2 labor hours while a specialty board takes 3 labor hours
Table 1
Planking
Cutting
Pressing
Direct Labor Hours
1,800
1,500
1,200
Machine Hours
300
600
1,200
Overhead Costs
$20,250
$17,625
$14,772
When using a plant-wide overhead rate based on direct labor hours, what is the cost per standard board for overhead?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
