# of purchase orders $400,000 overhead cost
# of shipments $100,000
# of setups $300,000
Direct labor hrs$125,000
# of inspections $75,000
During the year, 1000 purchase orders, 300 shipments, 600 setups, 750 inspections & 10,000 direct labor hours occurred to assemble monitors.
Assume a batch of 200 monitors has the following cost activity:
- Purchase order 7
- Material shipments 12
- Machine setups 2
- Direct labor hours50
- Inspections 3
1.Determine the overhead allocation for the batch of 200 monitors under the traditional overhead allocation based on direct hours?
2. Overhead allocated for receiving is $3,999.96. Determine overhead allocation for the batch under activity-based costing?