Computing bracelet cost using plantwide rate


Q1) Taylor Jones owns jewelry store. Job 555 involves creation of bracelet for one of his customers. Direct materials for bracelet amounted to $400, and direct labor was $200. It took four machine hours to complete  bracelet. Plantwide overhead rates are computed at 125 percent of direct labor cost. Taylor asked his accountant to look into \activity-based costing system. Two activities were recognized: machining and materials handling.

1. Using plantwide rate, how much would bracelet cost?

i) $760

ii) $725

ii) $600

iv) $850

2. Using activity-based costing, how much would bracelet cost?

i) $760

ii) $725

iii) $600

iv) $850

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Accounting Basics: Computing bracelet cost using plantwide rate
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