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inkster inkster
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Morrow Co. produces 3 products: Beta, Delta, and Gamma. Beta requires 400 purchase orders, Delta requires 600 purchase orders, and Gamma requires 1,000 purchase orders. Morrow has identified an ordering and receiving activity cost pool with allocated overhead of $180,000 for which the cost driver is purchase orders. Direct labor hours used on each product are 50,000 for Beta, 40,000 for Delta, and 110,000 for Gamma. How much ordering and receiving overhead is assigned to each product?
BetaDeltaGamma


▸
$60,000$60,000$60,000


▸
$45,000$36,000$99,000


▸
$40,500$45,000$94,500


▸
$36,000$54,000$90,000
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Managerial Accounting

Managerial Accounting


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bhturnerbhturner
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$36,000$54,000$90,000


Beta = $180,000 × [400 ÷ (400 + 600 + 1,000 purchase orders) = $36,000
Delta = $180,000 × [600 ÷ (400 + 600 + 1,000 purchase orders) = $54,000
Gamma = $180,000 × [1,000 ÷ (400 + 600 + 1,000 purchase orders) = $90,000
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