Solution-Determine the overhead rate for each activity

Determine the overhead rate for each activity

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Reference no: EM132606119

Question - PPG Company manufactures two products: Product SS and Product HH.

During January 50 of product SS and 300 of product HH were incurred, and overhead costs of P81, 000 were incurred. An analysis of overhead costs reveals the following activities:

Activity Cost Driver Total Cost

1. Materials handling Number of requisitions 30,000

2. Machine setups Number of setups 27,000

3. Quality inspections Number of inspections 24,000

The cost drive volume for each product was as follows:

Cost driver Product SS Product HH

Number of requisitions 400 600

Number of setups 150 300

Number of inspections 200 400

Instructions -

a. Determine the overhead rate for each activity.

b. Allocate the manufacturing overhead costs to the two products using ABC.

Reference no: EM132606119

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Determine the overhead rate for each activity

Reference no: EM132606119

Reference no: EM132606119

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