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: Machine setups $\quad 50$ setups
Quality inspections $\quad 305$ inspections
Machine hours $\quad 2,024$ machine hours 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: Machine setups $\quad 50$ setups
Quality inspections $\quad 305$ inspections
Machine hours $\quad 2,024$ machine hours 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: Machine setups $\quad 50$ setups
Quality inspections $\quad 305$ inspections
Machine hours $\quad 2,024$ machine hours 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 50\quad 5050 Setups Quality Inspections 305\quad 305305

The Controller for Ocean Sailboats Inc $\quad 50$ Setups
Quality Inspections $\quad 305$