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Author Question: Milan Manufacturing Company has identified three cost pools to allocate overhead costs. The ... (Read 68 times)

abc

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on: Mar 6, 2021
Milan Manufacturing Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:

Cost PoolOverhead CostsCost driverActivity level
Supervision of direct labor$539,000Direct labor-hours920,000
Machine maintenance$120,000Machine-hours1,000,000
Facility rent$215,000Square feet of area160,000
Total overhead costs$874,000

The accounting records show the Mossman Job consumed the following resources:

Cost driverActual level
Direct labor-hours300
Machine-hours1,675
Square feet of area70

If direct labor-hours are considered the only overhead cost driver, what is the single cost driver rate for Milan?
◦ $1.05 per direct labor-hour
◦ $0.59 per direct labor-hour
◦ $0.95 per direct labor-hour
◦ $1.71 per direct labor-hour
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by abc on Mar 6, 2021

yuyiding

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Reply #1 on: Mar 6, 2021
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abc

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Reply 2 on: Mar 6, 2021
Thanks for the timely response, appreciate it

jojobee318

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Reply 3 on: Yesterday
Wow, this really help

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