Bark Manufacturing has three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $90,000, $162,500, and $28,000, respectively. The expected annual use in each department is 1,000 setups, 12,500 machine hours, and 875 inspections. Compute the overhead rate for each activity. Machine setups $ 90 per setup Machining $ 13 per machine hour Inspections $ 32 pe

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facundobuzzetti facundobuzzetti · Answer 1 · 2019-10-28T16:26:22+01:00

Answer:

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Explanation:

Giving the following information:

Bark Manufacturing has three activities in its manufacturing process:

Machine setups:

Estimated annual overhead cost= $90,000

The expected annual use is 1,000 setups.

Machining:

Estimated annual overhead cost= $162,500

The expected annual use is 12,500 machine hours.

Inspections:

The estimated annual overhead cost= $28,000

The expected annual use is 875 inspections.

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Machine setups= 90,000/1000= $90 per setup

Machining= 162,500/12,500= $13 per machine hour.

Inspections= 28,000/875= $32 per inspection