Compute the activity rates for the installing floors

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Reference no: EM13646440

Haskell Hardwood Floors installs oak and other hardwood floors in homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity based costing system:

Overhead costs:

	Production overhead.........	$120,000
	Office expense..................	140,000
	Total..................................	$260,000

Distribution of resource consumption:

	Installing	Job
Activity Cost Pools	Floors	Support	Other	Total
Production overhead.........	55%	25%	20%	100%
Office expense..................	20%	50%	30%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.

The amount of activity for the year is as follows:

	Activity Cost Pool	Annual Activity
	Installing floors......	800 squares
	Job support.............	100 jobs
	Other......................	Not applicable

A "square" is a measure of area that is roughly equivalent to 1,000 square feet.

Required:

a. Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below:

	Installing	Job
	Floors	Support	Other	Total
Production overhead..........
Office expense...................
Total...................................

b.Compute the activity rates for the Installing Floors and Job Support activity cost pools by filling in the table below:

	Installing	Job
	Floors	Support
Production overhead..........
Office expense...................
Total...................................

c. Compute the overhead cost, according to the activity-based costing system, of a job that involves installing 3.2 squares.

Reference no: EM13646440

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