Question

Fellar Corp. has identified the following information:    Activity cost pools Materials handling $48,720 Machine maintenance 16,500...

Fellar Corp. has identified the following information:   

Activity cost pools
Materials handling $48,720
Machine maintenance 16,500
Cost drivers
Number of material moves 870
Number of machine hours 66,000


Required:
1. Calculate the activity rate for each cost pool. (Round your answers to 2 decimal places.)



2. Determine the amount of overhead assigned to Fellar’s products if they have the following activity demands: (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

Product A Product B
Number of material moves 520 350
Number of machine hours 41,900 24,100
Business   Accounting   
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Answer #1

1. Calculate the activity rate for each cost pool.

Activity cost pool activity rate
material handling (48720/870) 56 per moves
Machine maintenance (16500/66000) 0.25 per machine hour

2. Determine the amount of overhead assigned to Fellar’s products if they have the following activity demands

Product A Product B
Material handling 56*520 = 29120 56*350=19600
Machine maintenance 41900*.25=10475 24100*.25=6025
Total overhead 39595 25625
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