Slow Stool Company Is debating the use of direct labor cost or direct labor hours as the cost allocation base: Managerial Account Course Work, UPM, Malaysia

University Universiti Putra Malaysia (UPM)
Subject Managerial Account

Question 1

Slow Stool Company Is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year.


If Slow Silver Company uses direct labor cost as the allocation base, compute the allocated manufacturing overhead for the year.

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Question 2

Olive Company makes dessert pies for nationally convenient food chains. Olive Company is considering using ABC costing and has the following activity cost pools and information available:


Olive Company currently uses a plantable overhead rate based on total estimated machine hours of 100,000 hours.

Based on their estimates for ABC Costing, compute the allocated cost for all overhead costs for Job 607 using the following Information about the job.

# of units In the job = 4.900
# Pot units In each batch = 980
# of setups required to complete the job = 1
# of machine hours = 220

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