Question

Determine the overhead allocated to Job XZ3275 which has 150 pieces, requires 200 miles of driving, and 0.75 hours of logistics. (Round answer to 2 decimal places, e.g. 12.75.)

Answer 1

Answer:

Overhead allocated to Job XZ3275 $330.39

Explanation:

The computation of the overhead allocation is as follows;

But before that overhead rates is as follows

Activity rate = Estimated overhead cost ÷ Expected cost driver  

Activity Cost pool        Activity based overhead rate  

Loading and unloading         $1.02   per piece

                                  ($91,000 ÷ 89,500)

Travel                                      $0.79  per mile  

                                  ($457,000÷ 579,000 miles)

Logistics                     $26.69 per hour  

                                ($75,000 ÷ 2810 hours)

Now the overhead allocation is

Loading and unloading (150 pieces × $1.02 per piece) $152.51  

Travel   (200 miles × $0.79 per mile) $157.86  

Logistics (0.75 hours × $26.69 per hour) $20.02  

Overhead allocated to Job XZ3275 $330.39