The following cost information is avalable for Senkowski, Ltd.

Nov 9th, 2014
DreamIt
Category:
Accounting
Price: $5 USD

Question description

Senkowski Ltd. cost information: Activity-Purchasing, Allocation Base -Purchase orders, Volume of Activity 30,000, Overhead costs $150,000. Activity-Receiving, Allocation base Shipments received, Volume of Activity 15,000, Overhead Cost 60,000. Activity-Machine setups, Allocation Base-Setups, Volume of Activity 2,500, Overhead costs 200,000. Activity- Quality control, Allocation base Inspections, Volume of Activity 18,000, Overhead costs 90,000. Direct materials are $15 per unit for luxury handbags and $11 per unit for deluxe handbags. There were 12, 500 direct labor hours, each of which was charged to inventory at $18 per hour. A. Management is trying to decide between using the traditional allocation method based on direct labor hours and using activity-based costing. Calculate the overhead rates for each method. B. One particular batch of 40 luxury handbags had the following specifications: direct labor hours 8, purchase orders 4, shipments received 3, setups 2, inspections 12. Calculate the overhead to be allocated to the bags under the traditional and activity-based costing techniques. C.Which costing method do you think is better for the company? Why?


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: UCLA
PREMIUM TUTOR

Studypool has helped 1,244,100 students

Summary
Quality
Communication
On Time
Value
ashleyisgod
Feb 17th, 2017
" Top quality work from this guy! I'll be back! "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1820 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors