Nile Corp.has identified three cost pools to allocate overhead costs.The following estimates are provided for the coming year:

The accounting records show the Mossman Job consumed the following resources:

If Nile Corp.uses the three activity cost pools to allocate overhead costs,what are the activity-cost driver rates for supervision of direct labor,machine maintenance,and facility rent,respectively?
A)$0.60 per dlh;$0.16 per mh;$1.70 per sq ft
B)$1.67 per dlh;$6.25 per mh;$0.56 per sq ft
C)$0.60 per dlh;$0.16 per mh;$1.80 per sq ft
D)$0.50 per dlh;$0.16 per mh;$1.88 per sq ft

Question

Nile Corp.has identified three cost pools to allocate overhead costs.The following estimates are provided for the coming year:

The accounting records show the Mossman Job consumed the following resources:

If Nile Corp.uses the three activity cost pools to allocate overhead costs,what are the activity-cost driver rates for supervision of direct labor,machine maintenance,and facility rent,respectively?
A)$0.60 per dlh;$0.16 per mh;$1.70 per sq ft 
B)$1.67 per dlh;$6.25 per mh;$0.56 per sq ft 
C)$0.60 per dlh;$0.16 per mh;$1.80 per sq ft 
D)$0.50 per dlh;$0.16 per mh;$1.88 per sq ft

Quizplus · Accepted Answer

Supervision cost driver rate = 474,000 ÷ 790,000 dlh = $0.60 per dlh
Machine maintenance cost driver rate = $147,200 ÷ 920,000 mh = $0.16 per mh
Facility rent cost driver rate = $243,000 ÷ 135,000 sq ft = $1.80 per sq ft

Nile CorpHas Identified Three Cost Pools to Allocate Overhead Costs