How much overhead should be applied to customer order

Assignment Help Financial Accounting

Reference no: EM133422

Question :

Wake Construction installs and manufactures standard and custom-made cabinetry for residential homes. Last year, the company incurred $200,000 in overhead costs. After executing activity-based costing (ABC), the company's accountant identified the subsequent related information:

Activity Allocation Base Proportion of Overhead Cost

Material delivery and handling Number of deliveries 30%

Inspections Number of inspections 25%

Supervision Hours of supervisor time 20%

Purchasing Number of purchase orders 25%

The number of activities for standard and custom-made cabinets is as follows:

Standard Custom-made

Number of deliveries 200 100

Number of inspections 600 400

Hours of supervisor time 1,800 2,200

Number of purchase orders 1,000 1,000

In the past year, Wake received a customer order for a set of custom-made cabinets that would need the following:

Direct labor cost (25 hours at $15 per hour) $375

Direct materials (wood) (900 ft at $3.00 per foot) $2,700

Number of deliveries 3

Number of inspections 5

Hours of supervisor time 5

Number of purchase orders 3

Refer to the Wake Construction information given above. How much overhead should be applied to the above customer order?

Reference no: EM133422

Questions Cloud

Evaluate individually the increase in total income : Evaluate individually the increase or decrease in total income arising from the company's errors in evaluating or entering depreciation or in recording transactions affecting trucks, ignoring income tax considerations.

Translate following c++ program to pep/8 assembly language : Translate following C++ program to Pep/8 assembly language

Erp implementations are at risk to extensive cost overruns : ERP implementations are at risk to extensive cost overruns. Show three of the more usually experienced problems area. Explain four advantages and four disadvantages of developing an ERP system at a multinational corporation.

Describe disparity between vulnerability, threat and control : Describe disparity between vulnerability, threat and control

How much overhead should be applied to customer order : How much overhead should be applied to the above customer order? After executing activity-based costing (ABC), the company's accountant identified the subsequent related information:

Methods of defense and provide examples : Methods of defense and provide examples

Explain company''s accountant to administer : Will the decision about the transfer price affect consolidated total income? Which technique would be easiest for the company's accountant to administer? As the company's accountant, what advice could you provide to these officials?

Examine the key components of a decision support system : Examine the key components of a decision support system

Evaluate the amount and character of robbys deduction : Evaluate the amount and character of Robby's deduction(s) for this vacation home considering the cost allocation method that the IRS prefers is used.

User Account

All Pages