An asterisk (*) will appear to the right of an incorrect entry. The essay answers will not be graded.
a.
A B C
Single Rate ABC Percent
Overhead Overhead Change in
Allocation Allocation Allocation
per Unit per Unit (B – A) / A
Low
Medium
High
Low: Quantity Rate = Total
Machining hours /hour
Setup setups /setup
Order Processing orders /order
Total
Units
Activity cost per unit
Medium:
Machining hours /hour
Setup setups /setup
Order Processing orders /order
Total
Units
Activity cost per unit
High:
Machining hours /hour
Setup setups /setup
Order Processing orders /order
Total
Units
Activity cost per unit
b.
[Key essay answer here]
Exercise 26(11)-16
Name:
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0%
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c.
[Key essay answer here]
[Key essay answer here]
An asterisk (*) will appear to the right of an incorrect entry. The essay answers will not be graded.
a.
A B C
Single Rate ABC Percent
Overhead Overhead Change in
Allocation Allocation Allocation
per Unit per Unit (B – A) / A
Low $30.00 $58.06 93.5%
Low: Quantity Rate = Total
Machining 24 hours 160$ /hour 3,840$
Medium:
Machining 225 hours 160$ /hour 36,000$
High:
Machining 900 hours 160$ /hour 144,000$
costing must be less than the numerator under the single machine hour rate
method.
Exercise 26(11)-16
Name:
Solution
Section:
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Instructions
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ON
The machine hour rate is greater under the single rate method than under the activity-based
method because all the factory overhead is allocated by machine hours under the single rate
method. However, only a portion of the factory overhead is allocated under the machine rate
method using activity-based costing. The remaining factory overhead is allocated using the other