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Author Question: Gregory Enterprises has identified three cost pools to allocate overhead costs. The following ... (Read 130 times)

PhilipSeeMore

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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 PoolOverhead CostsCost driverActivity level
Supervision of direct labor$320,000Direct labor-hours800,000
Machine maintenance$120,000Machine-hours960,000
Facility rent$200,000Square feet of area100,000
Total overhead costs$640,000

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

Cost driverActual level
Direct labor-hours200
Machine-hours1,600
Square feet of area50

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.
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by PhilipSeeMore on Mar 6, 2021

Sierray

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Reply #1 on: Mar 6, 2021
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.
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PhilipSeeMore

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Reply 2 on: Mar 6, 2021
Excellent

TheDev123

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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