Quiz 2Due Jan 29 noon BW Inc manufacturers scarves The compa

Quiz #2-Due Jan 29 (noon) BW Inc. manufacturers scarves. The company has identifled three actvitiles in its manufacturing process: weaving, packaging, and Inspection the antioipated annual usage are: machine hours 5,000; labour hours 3,000; and number of inspections 400. f the total expected overhead of $130,000 ls allocated based on anticlpated machine hours, what is the predetermined overhead rato? $ dEstimated annual overhead cost for each actity is $75,000, $30,000 and $25,000 respectively. The cost driver for each activity and Using ABC, what are the ABC overhead rates for each activity? Weaving$ Packaging Inspection $

Solution

1)Predetermined overhead = Estimated overhead /estimated machine hours

             = 130000/ 5000

             =$ 26 per mH

2)Activity rates:

Weaving = 75000/5000= $ 15 per mH

Packaging= 30000/3000 = $10 per DLH

Inspection = 25000/400 = $ 62.5 per inspection