Wilkins Inc

Download Category:

Wilkins Inc.zip - (148.26 KB)
Wilkins Inc/Question.txt
Wilkins Inc/Screenshot_1.png
Wilkins Inc/Wilkins Inc.docx

Exercise 17-1
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.

Standard Custom
Direct labor costs $43,700 $102,000
Machine hours 1,500 1,380
Setup hours 96 440

Total estimated overhead costs are $298,400. Overhead cost allocated to the machining activity cost pool is $195,100, and $103,300 is allocated to the machine setup activity cost pool.

(a) Compute the overhead rate using the traditional (plant-wide) approach.
(b) Compute the overhead rates using the activity-based costing approach.
(c) Determine the difference in allocation between the two approaches.

Write a Review

Get a fresh solution of this question. Ask it now to our experts.

Ask Your Question

We have verified professionals who are ready to answer your question.


Save Time and Money

We choose experts who can quickly answer your question and that suit your budget.


Get Your Answer

Your satisfaction is 100% guaranteed. You can keep on asking questions until you get the answer you need.