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Jones Manufacturing Company makes two products. In the past, the company allocated overhead based on ...

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Jones Manufacturing Company makes two products. In the past, the company allocated overhead based on ...

Jones Manufacturing Company makes two products. In the past, the company allocated overhead based on estimated total direct labor hours of 20,000. Jones recently implemented an activity-based costing system and had determined that overhead can be broken into three overhead pools: processed purchase orders, machine setups, and good shipped. The following is a summary of company information:

Estimated Cost

Estimated Activities

Orders processed	$ 75,000	5,000 orders
Machine setups	12,000	500 machine hours
Shipping	30,000	60,000 shipments
	$117,000

Required:

a.	Calculate the company's overhead rate using a single cost pool.

b.	Calculate the company's overhead rates using the activity-based costing pools.

Textbook

Managerial Accounting

Edition: 4^th

Author: Davis

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