Turnbull Company produces two products and their overhead consists of setups $20,000; machining $2,220,000; and packing $80,000.Data for the current year follow:
The overhead allocated to Beta assuming a single overhead rate based on machine hours and assuming ABC, respectively, are:

A) $256,000 and $478,000
B) $464,000 and $456,000
C) $256,000 and $242,000
D) $464,000 and $478,000

Question

Turnbull Company produces two products and their overhead consists of setups $20,000; machining $2,220,000; and packing $80,000.Data for the current year follow:
   The overhead allocated to Beta assuming a single overhead rate based on machine hours and assuming ABC, respectively, are:

A) $256,000 and $478,000 
B) $464,000 and $456,000 
C) $256,000 and $242,000 
D) $464,000 and $478,000

Quizplus · Accepted Answer

Total costs = $20,000 + $2,220,000 + $80,000 = $2,320,000Single OH Rate Beta: $2,320,000 x [1,000 ÷ 1,000 + 4,000] = $464,000
Setups: $20,000 ÷ 20 + 20 setups = $500 per setup
Machining: $2,220,000 ÷ 1,000 + 4,000 MH = $444 per MH
Packing: $80,000 ÷ 150 + 350 orders = $160 per order
Solution for ABC: Beta: 20 x $500 + 1,000 x $444 + 150 x $160 = $478,000

Turnbull Company Produces Two Products and Their Overhead Consists of Setups