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barxatty [35]
3 years ago
6

Which of the following companies would be best served by a plantwide overhead rate? Multiple Choice A company that manufactures

few products and whose operations are labor intensive. A company whose products use overhead resources in very different ways. A company that manufactures many different products and whose operations are highly mechanized. A company whose products differ in batch size and complexity and consume different amounts of overhead resources. A company that manufactures many different products and whose operations are an equal mix of labor and mechanized work.
Business
1 answer:
Anna [14]3 years ago
7 0

Answer:

A company whose products differ in batch size and complexity and consume different amounts of overhead resources

Explanation:

Plantwide overhead rate is the overheads absorption rate calculated based on the total entity activity. This is ideal when when product consume overheads in <em>same</em> manner but in <em>different</em> quantities.

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Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to all
hammer [34]

Answer:

a. predetermined overhead rate for each activity

initial concept formation  = $3,310 per Project Change

design  = $3 per Square feet

construction oversight  = $1,130 per Month

b. Classification

unit-level activities :

design

batch level activities :

initial concept formation

Product level activities :

design<em> </em>

Facility level activities :

initial concept formation

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Explanation:

This question requires application of Activity Based Costing (ABC) method of allocating overheads.

For each overhead a rate is determined as follows :

<em>initial concept formation </em>

Predetermined overhead rate = Overhead Cost / Number of Project Changes

                                                  = $52,960/ 16

                                                  = $3,310 per Project Change

<em>design </em>

Predetermined overhead rate = Overhead Cost / Square feet

                                                  = $420,000/ 140,000

                                                  = $3 per Square feet

<em>construction oversight </em>

Predetermined overhead rate = Overhead Cost / Number of Months

                                                  = $118,650/ 105

                                                  = $1,130 per Month

<em>Classification</em>

The way the activity is to be absorbed in costing determine its classification

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Explanation:

Hope it helps

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