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Question 12 Thompson Company incurs overhead costs each year in its three main departments, machining ($600,000), inspections ($300,000) and packing ($100,000). Information about Windsor's two products is as follows: \begin{tabular}{|l|r|r|r|} \hline & Product X & Product Y & Total \\ \hline Machining hours & 1,800 & 2,200 & 4,000 \\ Inspections & 300 & 300 & 600 \\ Orders packed & 700 & 300 & 1,000 \\ Direct labor hours & 1,750 & 1,750 & 3,500 \\ \hline \end{tabular} Using ABC, how much overhead is assigned to Product X this year?

          Question 12
Thompson Company incurs overhead costs each year in its three main departments, machining ($600,000), inspections ($300,000) and packing ($100,000). Information about Windsor's two products is as follows:

\begin{tabular}{|l|r|r|r|}
\hline
 & Product X & Product Y & Total \\
\hline
Machining hours & 1,800 & 2,200 & 4,000 \\
Inspections & 300 & 300 & 600 \\
Orders packed & 700 & 300 & 1,000 \\
Direct labor hours & 1,750 & 1,750 & 3,500 \\
\hline
\end{tabular}

Using ABC, how much overhead is assigned to Product X this year?

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Question 12
Thompson Company incurs overhead costs each year in its three main departments, machining (600,000), inspections (300,000) and packing (100,000). Information about Windsor's two products is as follows:

Product X Product Y Total

Machining hours 1,800 2,200 4,000

Inspections 300 300 600

Orders packed 700 300 1,000

Direct labor hours 1,750 1,750 3,500

Using ABC, how much overhead is assigned to Product X this year?

Added by William S.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Yujie Wang

Step 1

To calculate the overhead rate for each activity, divide the total overhead cost for each activity by the total activity level for that activity. Overhead rate for machining = $600,000 / 4,000 machining hours = $150 per machining hour Overhead rate for Show more…

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Question 12 Thompson Company incurs overhead costs each year in its three main departments, machining ($600,000), inspections ($300,000), and packing ($100,000). Information about Windsor's two products is as follows: Product X: 1,800 machining hours, 300 inspections, 100 orders packed, 1,750 direct labor hours Product Y: 2,200 machining hours, 300 inspections, 1,750 orders packed Total: 4,000 machining hours, 600 inspections, 1,000 orders packed, 3,500 direct labor hours Using ABC, how much overhead is assigned to Product X this year?

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