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Xie Company identified the following activities costs and activity drivers for 2017 The company manufactures two types of go-karts Deluxe and Basic Activity Expected Costs Expected Activity

Xie Company identified the following activities, costs, and activity drivers for 2017. The company manufactures two types of go-karts: Deluxe and Basic.
 

Activity Expected Costs Expected Activity
Handling materials $ 625,000     100,000 parts
Inspecting product   900,000     1,500 batches
Processing purchase orders   105,000     700 orders
Paying suppliers   175,000     500 invoices
Insuring the factory   300,000     40,000 square feet
Designing packaging   75,000     2 models
 

   
Required:
1. Compute a single plantwide overhead rate, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours.
2. In January 2017, the Deluxe model required 2,500 direct labor hours and the basic model required 6,000 direct labor hours. Assign overhead costs to each model using the single plantwide overhead rate.

Jun 24 2020 View more View Less

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