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Exercise_17-1_Wilkins Inc.

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Question;Exercise = 17-1;Wilkins Inc. has;two types of handbags: standard and custom. The controller has decided to use a;plant wide 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;$51,800;$102,000;Machine;hours;1,130;1,480;Setup;hours;100;400;Total estimated overhead costs are $295,100. Overhead cost allocated to;the machining activity cost pool is $199,400, and $95,700 is allocated to;the machine setup activity cost pool.;(c) Determine the difference in allocation between;the two approaches.(Round answers to 0= decimal;places, e.g. $1,225.);Traditional;costing;Standard;$;Custom;=;$;=;Activity-based costing;Standard;$=;Custom;=;$

 

Paper#37501 | Written in 18-Jul-2015

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