Answered

Join IDNLearn.com to access a wealth of knowledge and get your questions answered by experts. Our platform offers reliable and detailed answers, ensuring you have the information you need.

A company has two products: Cakes and Cookies. It uses activity-based costing and has prepared the following analysis showing budgeted costs and activities. Use this information to compute (a) the company's overhead rates for each of the three activities and (b) the amount of overhead allocated to Cakes.

Sagot :

Answer and Explanation:

The computation is shown below:

a. Overhead rate for each of the three activities is

For activity 1

= $60,000 ÷1500

= $40

For activity 2

= $75,000 ÷ 3,000

= $25

For activity 3

= $90,000 ÷ 1,700

= $53

b. The amount of overhead allocated is

= 40 ×700 + 25 × 1500 + 800 × 53

= $28,000 + $37,500 + $42,400

= $107,900

View image Andromache
Thank you for joining our conversation. Don't hesitate to return anytime to find answers to your questions. Let's continue sharing knowledge and experiences! IDNLearn.com is your source for precise answers. Thank you for visiting, and we look forward to helping you again soon.