Solution-Compute the overhead rate using the traditional

Compute the overhead rate using the traditional approach

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Reference no: EM13503605

Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations.

Standard	Custom
Direct labor costs	$40,100	$108,000
Machine hours	1,210	1,310
Setup hours	110	390

Total estimated overhead costs are $299,700. Overhead cost allocated to the machining activity cost pool is $196,700, and $103,000is allocated to the machine setup activity cost pool.

(a) Compute the overhead rate using the traditional approach.

Predetermined overhead rate_______________% of direct labor cost

(b) The parts of this question must be completed in order. This part will be available when you complete the part above.

Reference no: EM13503605

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Compute the overhead rate using the traditional approach

Reference no: EM13503605

Reference no: EM13503605

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