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Pateel Papazian
Pateel Papazian, CPA
Category: Business and Finance Homework
Satisfied Customers: 24
Experience:  Financial Trainer and Consultant at Pateel Papazian Training and Consulting Group
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Wilkins Inc. has two types of handbags: standard and custom.

Customer Question

Wilkins Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations.
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Customer: Standard
Direct labor costs $59,800 $107,000
Machine hours 1,270 1,160
Setup hours 110 430Total estimated overhead costs are $304,500. Overhead cost allocated to the machining activity cost pool is $195,600, and $108,900 is allocated to the machine setup activity cost pool.
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Compute the overhead rate using the traditional (plantwide) approach. (Round answers to 2 decimal places, e.g. 12.25%.)
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Submitted: 1 year ago.
Category: Business and Finance Homework
Expert:  Pateel Papazian replied 1 year ago.
HiI'll work on it today
Expert:  Pateel Papazian replied 1 year ago.
Here you go.The formula is estimated overhead/Direct labor costs, so:$304,500/59,800+107,000=304,500/166,800=182.55%
Expert:  Pateel Papazian replied 1 year ago.
Hi,Are you ok with my answer? Just checking.