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Author Question: Extracts from cost information of Hebar Corp.: Simple L3 PackComplex L7 PackTotal Setup cost ... (Read 38 times)

Medesa

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Question 1

Dalrymple Company produces a special spray nozzle. The budgeted indirect total cost of inserting the spray nozzle is $68,750. The budgeted number of nozzles to be inserted is 11,000. What is the budgeted indirect cost allocation rate for this activity?
◦ $0.16
◦ $0.32
◦ $1.16
◦ $6.25

Question 2

Extracts from cost information of Hebar Corp.:

Simple L3 PackComplex L7 PackTotal
Setup cost allocated using direct labor-hours$19,250$5,750$25,000
Setup cost allocated using setup-hours$13,400$11,600$25,000

Assuming that setup-hours is considered a more effective cost drive for allocating setup costs than direct labor-hours. Which of the following statements is true of Hebar's setup costs under traditional costing?
◦ L3 pack is undercosted by $5,850
◦ L7 pack is undercosted by $5,750
◦ L3 pack is overcosted by $5,850
◦ L7 pack is overcosted by $5,850


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Marked as best answer by Medesa on Mar 6, 2021

smrtceo

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Medesa

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Reply 2 on: Mar 6, 2021
Excellent


connor417

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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