acct homework

Exercise 17-1
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   $42,700   $106,000
Machine hours   1,290   1,180
Setup hours   100   380

Total estimated overhead costs are $307,600. Overhead cost allocated to the machining activity cost pool is $196,000, and $111,600 is allocated to the machine setup activity cost pool.

 
(a)
Your answer is correct.
   
Compute the overhead rate using the traditional (plantwide) approach.
(Round answers to 2 decimal places, e.g. 12.25%.)

Predetermined overhead rate  
[removed]
 % of direct labor cost
 

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(b)
Compute the overhead rates using the activity-based costing approach.
(Round answers to 2 decimal places, e.g. $12.25.)

Machining  
$
[removed]
 per machine hour
Machine setup  
$
[removed]
 per setup hour
 

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Attempts: 0 of 3 used  
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(c)

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