Jones Manufacturing Company makes two products.In the past, the company allocated overhead based on estimated total direct labor hours of 20,000.Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: processed purchase orders, machine setups, and good shipped.The following is a summary of company information: Required:
a.Calculate the company's overhead rate using a single cost pool.
b.Calculate the company's overhead rates using the activity-based costing pools.

Question

Jones Manufacturing Company makes two products.In the past, the company allocated overhead based on estimated total direct labor hours of 20,000.Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: processed purchase orders, machine setups, and good shipped.The following is a summary of company information:  Required: 
a.Calculate the company's overhead rate using a single cost pool.
b.Calculate the company's overhead rates using the activity-based costing pools.

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The Answer of Jones Manufacturing Company makes two products.In the past, the company allocated overhead based on estimated total direct labor hours of 20,000.Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: processed purchase orders, machine setups, and good shipped.The following is a summary of company information:  Required: 
a.Calculate the company's overhead rate using a single cost pool.
b.Calculate the company's overhead rates using the activity-based costing pools.

Jones Manufacturing Company Makes Two Products