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(Solved): a.) Calculate the overhead costs allocated to the Tek engines and the overhead cost per unitb.) Calc ...
a.) Calculate the overhead costs allocated to the Tek engines and the overhead cost per unit
b.) Calculate the overhead costs allocated to the Sanko Muffler and the overhead cost per unit
c.) Calculate the overhead costs allocated to the Spectra Carburetor and the overhead cost per unit
Auto Moto Company manufactures car parts. The company performs five activities to produce the Tek Engine, the SanKo Muffler and the Spectra Carburetor. The activity rates for each activity are as follows: Auto Moto estimated the amount of activity to be used by the three products for month of June. The estimated activity-base usage quantities and units produced are provided in the table below.
Required a) Calculate the overhead costs allocated to the Tek Engines and the overhead cost per unit. b) Calculate the overhead costs allocated to the SanKo Muffler and the overhead cost per unit. c) Calculate the overhead costs allocated to the Spectra Carburetor and the overhead cost per unit.
Expert Answer
ANSWER: Allocation of overheads = activity rate x number of cost drivers for that activity. Activity rate Teak Engine SanKo Muffler S