Private Corporation manufactures two types of transpondersno. 156 and no. 157and applies manufacturing overhead to...
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Accounting
Private Corporation manufactures two types of transpondersno. 156 and no. 157and applies manufacturing overhead to all units at the rate of $79.00 per machine hour. Production information follows.
No. 156
No. 157
Anticipated volume (units)
7,000
16,500
Direct material cost
$
45
$
70
Direct labor cost
50
30
The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours worked, and outgoing shipments, the activities' three respective cost drivers, follow.
No. 156
No. 157
Total
Setups
65
45
110
Machine hours worked
15,500
28,000
43,500
Outgoing shipments
125
85
210
The firm's total overhead of $3,436,500 is subdivided as follows: manufacturing setups, $265,000; machine processing, $2,665,000; and product shipping, $506,500.
Required:
Compute the pool rates that would be used for manufacturing setups, machine processing, and product shipping in an activity-based costing system.
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