What is the total overhead costs allocated to one hoodie

Assignment Help Managerial Accounting

Reference no: EM133502614

QUESTION:

Alexander Inc. manufactures two products: Basic and Delux hoodies. The manufacturing process involves two activities: cutting and sewing. Expected overhead costs and cost drivers are as follows:

Cutting	Sewing
Overhead costs	$570,000	$675,000
Machine hours	950,000	114,000
Direct labour hours	47,250	15,000

The company has always used the traditional costing method and a plantwide overhead rate, using direct labour hours as their cost driver.

Currently management is considering switching to an activity based costing system. If they make the change then Cutting will use machine hours as the cost driver and Sewing will use direct labour hours as the cost driver.

What is the company's current plantwide overhead rate per direct labour hour? Be sure to apply the entry rules!

One (1) hoodie uses the following actuals:

Cutting	Sewing
Machine hours	3	1
Direct labour hours	1	2

What is the total overhead costs allocated to one (1) hoodie if the company continues to use the plantwide overhead rate?

If the company switched to an activity-based costing system, what would be the activity-based overhead rate for Cutting?

If the company switched to an activity-based costing system, what would be the activity-based overhead rate for Sewing?

One (1) hoodie uses the following actuals:

	Cutting	Sewing
Machine hours	3	1
Direct labour hours	1	2

What is the total overhead costs allocated to one (1) hoodie if the company switches to an activity-based costing system?

HINT: to calculate the total overhead costs allocated you must add together the allocation for both Cutting and Sewing activities!

Reference no: EM133502614

Questions Cloud

Why might juvenile be waived to adult court : Why might a juvenile be waived to adult court? How does the waiver to adult court process work? What other types of judicial waivers exist?

Critique example of a professional organization use of media : PHYS 2426- Critique an example of a professional organization's use of media to promote a health policy agenda. Discuss attributes of success or lack thereof.

What will you continue to work on : How has your writing developed? Where were you when we began, and where are you now? What will you continue to work on? What makes you proudest about your

Identify a significant environmental problem : Identify a significant environmental problem (ex. water quality, air pollution, etc.) that is relevant to people living in New York

What is the total overhead costs allocated to one hoodie : What is the total overhead costs allocated to one (1) hoodie if the company switches to an activity-based costing system?

What will future of healthcare be and how we serve patients : What will the future of healthcare be and how will we serve the patients in the future without increasing costs and clinician shortages?

Describe how the four functions of management relate : Describe how the four functions of management relate to each other. identify one strategic goal and trace that goal through the tactical and operational levels

Explain Philip Behavior : Which social theories can be used to explain Philip's behavior, and which social theory is most applicable here?

Do you think that nursing is a science-an art or both : Do you think that compassion can be taught, or do you believe compassion is a moral virtue? Briefly explain your response.

User Account

All Pages