Author Question: Gregory Enterprises has identified three cost pools to allocate overhead costs. The following ... (Read 129 times)

PhilipSeeMore · **on:** Mar 6, 2021

Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:

Cost Pool

Overhead Costs

Cost driver

Activity level

Supervision of direct labor

$320,000

Direct labor-hours

800,000

Machine maintenance

$120,000

Machine-hours

960,000

Facility rent

$200,000

Square feet of area

100,000

Total overhead costs

$640,000

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

Cost driver

Actual level

Direct labor-hours

200

Machine-hours

1,600

Square feet of area

50

Which method of allocation probably best estimates actual overhead costs used? Why?
◦ Single direct labor-hours cost driver because it is best to allocate total costs uniformly to individual jobs.
◦ Single direct labor-hours cost driver because it is easiest to analyze and interpret.
◦ Three activity-cost drivers because they best reflect the relative consumption of resources.
◦ Three activity-cost drivers because product costs can be significantly cross-subsidized.

Sierray · **Reply #1 on:** Mar 6, 2021

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 64% of students answer this correctly