Business, 13.10.2020 02:01, KindaSmartPersonn
Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow: Fabric Case Leather Case Number of labor hours 17,000 11,000 Number of material moves 560 1,040 Number of setups 35 135 Total estimated overhead costs are $249,800, of which $192,000 is assigned to the materials handling cost pool and $57,800 is assigned to the setup cost pool. Required :1. Calculate the overhead assigned to the fabric case using the traditional costing system based on direct labor hours. (Do not round intermediate calculations.)Overhead assigned:2. Calculate the overhead assigned to the fabric case using ABC. Overhead assigned:3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC?Fabric case:
Answers: 2
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Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditiona...
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