Sheridan Company uses three activity pools to apply overhead to its products. Each activity has...
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Sheridan Company uses three activity pools to apply overhead to its products. Each activity has a cost driver used to assign the overhead costs to the product. The activities and related overhead costs are as follows: product design $34,400; machining $256,250; and material handling $85,951. The cost drivers and estimated use are as follows. Activity Cost Pools Activities Estimated Use of Cost Drivers per Activity Product design Number of product changes 10 Machining Machine hours 125,000 Material handling Number of set-ups 101 Calculate the predetermined overhead rate for each activity. (Round overhead rate for machining activity to 2 decimal places, e.g. 15.25.) Activity Overhead Rate Product design S per product change Machining $ per machine hr. Material handling per set-up
Sheridan Company uses three activity pools to apply overhead to its products. Each activity has a cost driver used to assign the overhead costs to the product. The activities and related overhead costs are as follows: product design $34,400; machining $256,250; and material handling $85,951. The cost drivers and estimated use are as follows.
Activity Cost
Pools
Activities
Estimated Use of
Cost Drivers per Activity
Product design
Number of product changes
10
Machining
Machine hours
125,000
Material handling
Number of set-ups
101
Calculate the predetermined overhead rate for each activity. (Round overhead rate for machining activity to 2 decimal places, e.g.
15.25.)
Activity
Overhead Rate
Product design
S
per product change
Machining
$
per machine hr.
Material handling
per set-up
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