Columbia Southern University Operations And Supply Chain Management Assignment Help - Senkowski Ltd

Question - Senkowski Ltd. cost information: Activity-Purchasing, Allocation Base -Purchase orders, Volume of
Activity 30,000, Overhead costs $150,000. Activity-Receiving, Allocation base Shipments received,
Volume of Activity 15,000, Overhead Cost 60,000. Activity-Machine setups, Allocation Base-Setups,
Volume of Activity 2,500, Overhead costs 200,000. Activity- Quality control, Allocation base
Inspections, Volume of Activity 18,000, Overhead costs 90,000. Direct materials are $15 per unit for
luxury handbags and $11 per unit for deluxe handbags. There were 12, 500 direct labor hours, each
of which was charged to inventory at $18 per hour. A. Management is trying to decide between using
the traditional allocation method based on direct labor ho ...Read More urs and using activity-based costing.
Calculate the overhead rates for each method. B. One particular batch of 40 luxury handbags had the
following specifications: direct labor hours 8, purchase orders 4, shipments received 3, setups 2,
inspections 12. Calculate the overhead to be allocated to the bags under the traditional and activity-
based costing techniques. C.Which costing method do you think is better for the company? Why? ...Read Less

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