Answered

Explore Westonci.ca, the top Q&A platform where your questions are answered by professionals and enthusiasts alike. Explore a wealth of knowledge from professionals across various disciplines on our comprehensive Q&A platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

Chapter 5 Activity Based Costing Licensed Gear Co. manufactures and sells college athletic fan gear and uses activity-based costing for overhead costs. Licensed Gear Co. supplied the following financial information concerning its overhead costs and the activity based costing system in 2020: Overhead costs: Distribution of resource consumption: The amount of activity for the year is as follows: How much OVERHEAD cost would be allocated to Cyclone Tailgaters, a customer who initiated 20 orders and 5 custom designs in 2020

Sagot :

anthougo

Question Completion:

Overhead costs:

Wages & salaries $ 925,000

Factory depreciation  125,000

Marketing department expenses 330,000

Total $ 1,380,000

Distribution of resource consumption:

                                                   Activity Cost Pools

                                        Customer       Product         Others   Total

                                         Orders          Designs

Wages & salaries               42%                46%               12%      100%

Factory depreciation         53%                33%                14%      100%

Marketing

department expenses     41%                 34%                  5        100%

The amount of activity for the year is as follows:

Cost Pool                 Activity

Customer Orders   2,125 Orders

Product Designs       325 Designs

Answer:

Licensed Gear Co.

The Overhead cost allocated to Cyclone Tailgaters is:

=  $15,475.70

Explanation:

a) Data and Calculations:

Distribution of resource consumption:

                                                   Activity Cost Pools

                                        Customer       Product         Others   Total

                                         Orders          Designs

Wages & salaries               42%                46%               12%      100%

Factory depreciation         53%                33%                14%      100%

Marketing

department expenses     41%                 54%                  5        100%

Activity Cost Pools:      Wages          Factory   Marketing        Total

                                    & salaries       Dept.        Dept.  

Customer orders        $388,500     $66,250   $135,300     $590,050

Product Designs           425,500        41,250      178,200       644,950

Others                             111,000         17,500       16,500        145,000

Total                           $925,000   $125,000   $330,000  $1,380,000

Overhead rates:        Amount        Activity            Overhead Rates

Customer orders     $590,050     2,125 Orders          $277.67

Product Designs      $644,950        325 Designs     $1,984.46

Cyclone Tailgaters  Activity   Overhead Rate    Allocated Overhead

Customer orders       20          $277.67                  $5,553.40

Product designs          5        $1,984.46                  $9,922.30

Total overhead costs allocated to Cyclone           $15,475.70

Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Thank you for choosing Westonci.ca as your information source. We look forward to your next visit.