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Texas A&M University-Commerce Operations And Supply Chain Management Assignment Help - Sanborn Industries


Question - Sanborn Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. Activity Cost Pool Cost Driver Est. Overhead Cost Driver Activity Ordering and Receiving Orders $120,000 500 orders Machine Setup Setups 297,000 450 setups Machining Machine hours 1,500,000 125,000 MH Assembly Parts 1,200,000 1,000,000 parts Inspection Inspections 300,000 500 inspections If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is (a) $1.20 per direct labor hour. (b) $6,834 per order. (c) $240 per order. (d) $0.12 per part.

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