lift jack company has seven activity cost pools and two products it expects to produ 637179
Lift Jack Company has seven activity cost pools and two products. It expects to produce 200,000 units of its automobile scissors jack and 80,000 units of its truck hydraulic jack. Having identified its activity cost pools and the cost drivers for each cost pool, Lift Jack Company accumulated the following data relative to those activity cost pools and cost drivers.
|
Annual Overhead Data
|
||||
|
Activity Cost Pools |
|
Cost Drivers |
Estimated Overhead |
|
|
Ordering and receiving Machine setup Machining Assembling Inspecting and testing Painting Supervising |
|
Purchase orders Setups Machine hours Parts Tests Parts Direct labor hours |
|
$ 200,000 600,000 2,000,000 1,800,000 700,000 300,000 1,200,000 |
|
|
|
|
|
$6,800,000 |
|
|
Expected Use of Cost Drivers per Product |
|
|
Expected Use of Cost Drivers per Activity |
Scissors Jacks |
Hydraulic Jacks |
|
2,500 orders |
1,000 |
1,500 |
|
1,200 setups |
500 |
700 |
|
800,000 hours |
300,000 |
500,000 |
|
3,000,000 parts |
1,800,000 |
1,200,000 |
|
35,000 tests |
20,000 |
15,000 |
|
3,000,000 parts |
1,800,000 |
1,200,000 |
|
200,000 hours |
130,000 |
70,000 |