Compute the overhead cost for its osowhatso production

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Reference no: EM131115612

Activity-Based Costing: The Pinaforie Company used the following four cost pools in calculation overhead allocations for its Osowhatso Production during December:

Activity Cost Pool

Activity Measure

Activity Rate

Set-Up Costs

Batches Run

$1,200 per batch

Depreciation

Machine Hours

$10 per machine hour

Electric Costs

Kilowatt Hours

$20 per kilowatt hour

Quality Control

Inspection hours

$40 per inspection hour

December production resulted in 12,400 Osowhatso's produced.  It took 9,500 hours of machine time, requiring 200 batches of production, 3,000 kilowatt hours of electricity were used and 1,600 hours of inspection time were required for quality control.

Required:

Compute the overhead cost for its Osowhatso Production during December using activity-based costing methods.

Compute the overhead cost for its Osowhatso Production during December if they just used one cost rate (the "traditional method").  The single-based cost allocation would be based on estimated total overhead costs of $450,000 and a rate based on machine hours, which were estimated to be 9,000 machine hours.

Reference no: EM131115612

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