Question

Marigold, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats.

Answer 1

Answer:

Designing= $42 per designer hour

Sizing and cutting= $26.85 per machine hour

Stitching and trimming= $17.75 per labor hour

Wrapping and packing= $10.5 finished unit

Explanation:

To calculate the activity-based overhead rates, we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Designing= 445,200/10,600= $42 per designer hour

Sizing and cutting= 4,081,200/152,000= $26.85 per machine hour

Stitching and trimming= 1,491,000/84,000= $17.75 per labor hour

Wrapping and packing= 346,500/33,000= $10.5 finished unit