Rawlings
Corp. has two product lines, A and B. Rawlings has identified the following
detailed information about its cost pools and cost drivers.
|
Cost pools
|
|
Material
handling
|
$56,320
|
Machine
maintenance
|
$17,850
|
Cost drivers
|
|
Number
of material moves
|
440
|
Number
of machine hours
|
51,000
|
Requirement 1:
|
Calculate
Rawlings’ activity rate for each cost pool. (Round
your maintenance answer to 2 decimal places. Omit the "$" sign in
your response.)
|
Activity
rate
|
||
Materials Handling
|
$
128
 |
per material move
|
Machine Maintenance
|
$
0.35
|
per machine hour
|
Requirement 2:
|
Determine
the total amount of overhead assigned to Rawlings' products if they have the
following requirements: (Omit the "$"
sign in your response.)
|
Product
A
|
Product
B
|
|
Number of material
moves
|
250
|
190
|
Number of machine
hours
|
17,300
|
33,700
|
Total
overhead assigned
|
|
Product A
|
$
38,055
|
Product B
|
$
36,115
|
Explanation:
1:
|
Material Handling: $56,320 /
440 = $128 /move
|
Maintenance: $17,850 /
51,000 = 0.35 /machine hr
|
2:
|
Product A
|
||
Materials Handling:
|
250
moves × $128 =
|
$
32,000
|
Maintenance:
|
17,300
MH × $0.35 =
|
6,055
|
Total
OH
|
$
38,055
|
|
Product B
|
||
Materials Handling:
|
190
moves × $128 =
|
$
24,320
|
Maintenance:
|
33,700
MH × $0.35 =
|
11,795
|
Total
OH
|
$
36,115
|
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