ACCOUNTING PAPER

Accounting Paper



Accounting Paper

Requirement 1:

Compute the predetermined overhead rate (i.e., activity rate) for each activity cost pool. (Round your answers to the nearest whole number. Omit the "$" sign in your response.)

  Activity Cost Pool

Activity Rate         

Machining

$

 

per

MH

Purchase orders

$

 

per

order

Parts management

$

 

per

part type

Testing

$

 

per

test

General factory

$

 

per

DLH

Answer 1

Machining $ 21 per MH

Purchasing Orders$ 167 orders

Parts Management$ 206 parts types

Testing$ 680 per test

General Factory$ 14 DLHs

Activity Based Costing

Activity based costing (ABC) is a relative new way to allocate costs to specific processes and services. This system assures that the costs are accurately distributed to the products or services that generated them. ABC illustrates costs more accurately, ...