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24 January, 10:05

Weisman, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats.

Activity Cost Pools Estimated Overhead Estimated Use of Cost

Drivers per Activity Designing $443,260 14,800 designer hours

Sizing and cutting 3,960,600 164,000 machine hours

Stitching and trimming 1,418,100 81,500 labor hours

Wrapping and packing 330,750 31,500 finished units

Compute the activity-based overhead rates using the following budgeted data for each of the activity cost pools. (Round answers to 2 decimal places, e. g. 12.25.)

Activity-based overhead rates

Designing $ per designer hour

Sizing and cutting $ per machine hour

Stitching and trimming $ per labor hour

Wrapping and packing $ per finished unit

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Answers (1)
  1. 24 January, 10:33
    0
    Designing $ per designer hour

    = 443,260/14,800 = $29.95 per hour

    Sizing and cutting $ per machine hour

    =3,960,600/164,000 = $24.15 per hour

    Stitching and trimming $ per labor hour

    =1,418,100 / 81,500 = $17.5 per labor hour

    Wrapping and packing $ per finished unit=330,750 / 31,500 = $10.5 per finished unit

    Explanation:

    Working

    Activity Cost Estimated Overhead Estimated Use Drivers per Activity

    Pools of Cost

    Designing $443,260 14,800 designer hours

    Sizing and cutting 3,960,600 164,000 machine hours

    Stitching and trimming 1,418,100 81,500 labor hours

    Wrapping and packing 330,750 31,500 finished units

    Activity-based overhead rates

    Designing $ per designer hour

    = 443,260/14,800 = $ 29.95 per hour

    Sizing and cutting $ per machine hour

    =3,960,600/164,000 = $ 24.15 per hour

    Stitching and trimming $ per labor hour

    =1,418,100 / 81,500 = $ 17.5 per labor hour

    Wrapping and packing $ per finished unit=330,750 / 31,500 = $ 10.5 per finished unit
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