Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for...
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Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Standard Premium Units produced Production runs per quarter Direct materials cost per unit $ $ Direct labor cost per unit Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision $ Setup labor Incoming inspection Total overhead $ Exercise Algo ActivityBased Costing and Cost Driver Rates LO Required: Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming inspection. Compute the cost driver rates for the proposed system at Benton.
Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow:
Standard Premium
Units produced
Production runs per quarter
Direct materials cost per unit $ $
Direct labor cost per unit
Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow:
Supervision $
Setup labor
Incoming inspection
Total overhead $
Exercise Algo ActivityBased Costing and Cost Driver Rates LO
Required:
Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter?
The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming inspection. Compute the cost driver rates for the proposed system at Benton.
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