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12 Mar 2018
EXERCISE 7-9 Second-Stage Allocation to an Order [LO7-4] Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making pur- poses. The company has four activity cost pools as listed below: Activity Cost Pool Activity Measure Activity Rate Order size Customer orders ..... Product testing ........ Selling ............... Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls $16.85 per direct labor-hour $320.00 per customer order $89.00 per testing hour $1,090.00 per sales call The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 200 direct labor-hours, 4 hours of product testing, and 2 sales calls. Required: Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?
EXERCISE 7-9 Second-Stage Allocation to an Order [LO7-4] Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making pur- poses. The company has four activity cost pools as listed below: Activity Cost Pool Activity Measure Activity Rate Order size Customer orders ..... Product testing ........ Selling ............... Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls $16.85 per direct labor-hour $320.00 per customer order $89.00 per testing hour $1,090.00 per sales call The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 200 direct labor-hours, 4 hours of product testing, and 2 sales calls. Required: Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?
Nestor RutherfordLv2
15 Mar 2018
