The Controller for Ocean Sailboats Inc $\quad 50$ Setups
Quality Inspections $\quad 305$

question 65

Essay

The controller for Ocean Sailboats Inc., a company which uses an automated process to make sailboats, established the following overhead cost pools and cost drivers: A recent order for sailboats used: Machine setups $\quad 50$ setups
Quality inspections $\quad 305$ inspections
Machine hours $\quad 2,024$ machine hours Required:
1.What is the overhead rate per machine hour if the number of machine hours is used as a single cost driver under traditional costing system?
2.Utilizing traditional costing, how much overhead is assigned to the order based on machine hours as a single cost driver?
3.Utilizing ABC, how much total overhead is assigned to the order?

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Definitions:

Customers Served

The number or segment of clients to whom a business has provided goods or services.

Marginal Products

The additional output that results from using one more unit of a particular input, holding all other inputs constant.

Sales Clerks

Employees in retail stores responsible for assisting customers, conducting transactions, and maintaining the arrangement of goods.

Customers Served

A measure of how many clients or customers a business, organization, or service has provided for in a given period.