EA11.

LO 6.3Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC:

What would be the predetermined rate for each cost pool?

Question

Business

Elliot Stark

23 May, 08:40

EA11.

LO 6.3Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC:

What would be the predetermined rate for each cost pool?

+1

Answers (1)

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Mateo Stone · Answer 1

Predetermined rates for each cost pool

Ordering = $120,000

240,000 orders

= $0.50 per order

Machine set-up = $85,000

340,000 set-ups

= $0.25 per set-up

Inspection = $75,000

75,000 inspections

= $1 per inspection

Explanation:

The predetermined rates are obtained by dividing the estimated overhead for each cost pool by the cost driver.

EA11.LO 6.3Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC:What would be the predetermined rate for each cost pool?

EA11.

LO 6.3Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC:

What would be the predetermined rate for each cost pool?