Calculate manufacturing overhead rates

Reference no: EM131124930

Activity-based costing Brooklyn Cycles produces custom bicycles and has used a traditional manufacturing overhead application rate based on direct labor hours. Currently, overhead is applied at the rate of $26/DLH. Brooklyn is now considering using activity-based driver rates to improve manufacturing overhead costing accu- racy. Budgeted manufacturing overhead costs for expected driver activity are:

Machining time ...................

Budgeted Cost

$250,000

Budgeted Activity

10,000 hours

Direct labor time .................

$280,000

20,000 hours

Inspection time ...................

$ 32,000

4,000 hours

Required:

Calculate manufacturing overhead rates that would be applied to bicycles produced using activity-based costing, and explain how Brooklyn Cycles could achieve improved costing accuracy.

Reference no: EM131124930

Questions Cloud

Identify places you still need to improve : Describe problems and setbacks, identify places you still need to improve, and explain what things would help you improve your eating habits.

What is the combined annual holding and ordering cost : The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is $50.00. It costs $60.00 to place an order for SKU 005, and the user of SKU 005 has a per year inventory carrying cost of 25% of unit cost. Assume 250 wo..

What is the firm''s economic profit or loss in equilibrium : In equilibrium, approximately what is the firm's total cost and total revenue?

Ability-enthusiasm-stability and concern for others : Describe the following leadership qualities: ability, enthusiasm, stability, and concern for others. (II) Use examples from our book to provide the details of how each quality enhances leadership effectiveness. (III) Explain what results from lack of..

Calculate manufacturing overhead rates : Activity-based costing Brooklyn Cycles produces custom bicycles and has used a traditional manufacturing overhead application rate based on direct labor hours. Currently, overhead is applied at the rate of $26/DLH. Brooklyn is now considering usin..

Relationship in efficiency and ethical behavior for leaders : Based on the response to Hurricane Katrina, what is the relationship between efficiency and ethical behavior for leaders? How could the response to the Hurricane Katrina disaster been more effective, and thus more ethical?

Doughnuts directly conflicted with his goal : Research Problem 2. Your client, John Butler, is an avid Houston Astros fan. Last March at the Astros' home opener, as a result of a random drawing of those in attend- ance at the game, John won 300 Shipley Do-Nut coupons. Each coupon entitled him..

Have you seen it used in the human services field : Select one theory that you have personally experienced in your career or that you find particularly interesting in its approach. Have you seen it used in the Human Services field or in another field? Was it effective or ineffective? Why does it ho..

Construct a model in the spirit of kinked demand : Construct a model in the spirit of kinked demand for the setting of an N firm oligopoly.

User Account

All Pages