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Author Question: Schwynn Inc. manufactures street bicycle tires and mountain bicycle tires. To determine the amount ... (Read 58 times)

bubba123

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on: Feb 5, 2023
Schwynn Inc. manufactures street bicycle tires and mountain bicycle tires. To determine the amount of overhead to assign to each product line, the controller, Chu, has developed the following information.

StreetMountain
Estimated tires produced25,00015,000
Direct labor hours per tire24

Total estimated overhead costs for the two product lines are $990,000.

Required:

a.Compute the overhead cost assigned to the street tires and mountain tires, assuming
the
company uses a single cost pool and direct labor hours to allocate overhead costs.
b.Chu is not satisfied with the traditional method of allocating overhead because he
believes
that most of the overhead costs relate to the mountain tire product line because of its
complexity. He therefore develops the following three activity cost pools and related
cost drivers to better understand these costs.


​Expected Use of Estimated Overhead
Activity Cost PoolsCost DriversCosts
Setting up machines500 setups$  90,000
Assembling40,000 labor hours500,000
Inspection500 inspections400,000
Compute the activity-based overhead rates for these three cost pools.

c.Compute the cost that is assigned to the street tires and mountain tires product lines
using an activity-based costing system, given the following information.

Expected Use of Cost Drivers per Product
StreetMountain
Number of setups150350
Direct labor hours25,00015,000
Number of inspections180320

d.What do you believe Chu should do?
Managerial Accounting ¦ Davis ¦ 4th Edition
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Marked as best answer by bubba123 on Feb 5, 2023

furthoh

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Reply #1 on: Feb 5, 2023
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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bubba123

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Reply 2 on: Feb 5, 2023
YES! Correct, THANKS for helping me on my review

Bigfoot1984

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

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