Reference no: EM131755647

Need this solved within an hour:

A manufacturing produces three products:  Desk, Chairs, and Cabinets. The following information is available for each product.

	Desk	Chairs	Cabinets
Direct material cost per unit	$60.00	$30.00	$50.00
Direct labor cost per hour	$15.00	$16.75	$12.80

Bella Manufacturing presently applies overhead using a predetermined rate based on direct labor hours.The product leader for Chairs has suggested that Bella Manufacturing switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for the year:

Activity	Recommended Cost Driver	Estimated Cost	Estimated Cost Driver Units
Ordering Cost	Purchase Orders	$33,912	1,256 Purchase Orders
Machine Operations	Machine Hours	$2,430,000	13,500 hours
Environmental Compliance	Compliance Test	$125,400	110 test
		$2,589,312

The following is actual information for April

	Actual April Production
	Desk	Chairs	Cabinets
Number of Units Produced	4,375	8,200	5,400
Direct Labor Hours	58,250	45,200	42,250
Machine Hours	375	206	442
Compliance Test	2	3	5
Purchase Orders	34	59	45

Required:

1.  Compute the predetermined overhead rate for each cost driver recommended by the product leader of Chairs.

2.  Estimate the total overhead allocated to Chairs for April using Activity Based Costing

3.  Estimate the total overhead allocated to Cabinets for April using Activity Based Costing