Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso’s total overhead costs consist of assembly costs and inspection costs. The following information is available:Cost Titanium Aluminum Total CostAssembly 500 mach. hours 500 mach. hours $60,000Inspections 350 150 $100,0002,100 labor hours 1,900 labor hours Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing.Using activity-based costing, how much assembly cost is assigned to titanium racquets?
Boswell Company manufactures two products, Regular and Supreme. Boswell’s overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is:Regular SupremeDirect labor hours 10,000 15,000Machine hours 10,000 30,000Number of parts 90,000 160,000Overhead applied to Regular using activity-based costing is
Which best describes the flow of overhead costs in an activity-based costing system?
An activity-based overhead rate is computed as follows:
Estimated costs for activity cost pools and other item(s) are as follows:Machining $500,000Assembling 200,000Advertising 450,000Inspecting and testing 175,000Total estimated overhead is
The presence of any of the following factors would suggest a switch to ABCexcept when
Use of activity-based costing will result in the development of
An example of an activity cost pool is
Direct labor is sometimes the appropriate basis for assigning overhead cost to products. It is appropriate to use direct labor when which of the following is true?
An activity that has a direct cause-effect relationship with the resources consumed is a(n)