The controller for Ocean Sailboats Inc., a company which uses an automated process to make sailboats, established the following overhead cost pools and cost drivers: A recent order for sailboats used: Required:
1. What is the overhead rate per machine hour if the number of machine hours is used as a single cost driver under traditional costing system?
2. Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver?
3. Utilizing ABC, how much total overhead is assigned to the order?

Question

The controller for Ocean Sailboats Inc., a company which uses an automated process to make sailboats, established the following overhead cost pools and cost drivers:  A recent order for sailboats used:  Required:
1. What is the overhead rate per machine hour if the number of machine hours is used as a single cost driver under traditional costing system?
2. Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver?
3. Utilizing ABC, how much total overhead is assigned to the order?

Quizplus · Accepted Answer

The Answer of The controller for Ocean Sailboats Inc., a company which uses an automated process to make sailboats, established the following overhead cost pools and cost drivers:  A recent order for sailboats used:  Required:
1. What is the overhead rate per machine hour if the number of machine hours is used as a single cost driver under traditional costing system?
2. Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver?
3. Utilizing ABC, how much total overhead is assigned to the order?

The Controller for Ocean Sailboats Inc