Business, 20.04.2020 20:43 christopherluckey7

Xie Company identified the following activities, costs, and activity drivers for 2017. The company manufactures two types of go-karts: Deluxe and Basic.

Activity Expected Costs Expected Activity
Handling materials $625,000 100,000 parts
Inspecting product 900,000 1,500 batches
Processing purchase orders 105,000 700 orders
Paying suppliers 175,000 500 invoices
Insuring the factory 300,000 40,000 square feet
Designing packaging 75,000 2 models

Required:
a. Compute a single plantwide overhead rate for the year, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours.
b. In January of this year, the Deluxe model required 2,500 direct labor hours and the basic model required 6,000 direct labor hours. Assign overhead costs to each model using the single plantwide overhead rate.

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