1. Outdoor Play manufactures two products: Swing Along and Ride Away. The company's overhead costs consist of setting up machines, $24,000; machining, $36,000; and inspecting, $18,000. During the year, 5,000 Swing Alongs were produced and 20,000 Ride Aways. Additional information on the two products is:
Swing Along Ride Away
Direct labor hours 8,000 12,000
Machine setups 20 40
Machine hours 2,000 6,000
Inspections 20 30
2. How much overhead will be applied to Swing Along using traditional costing using direct labor hours as the basis for allocation?
a. $31,200
b. $39,000
c. $24,200
d. $15,600
3. How much overhead was applied to Swing Along using activity-based costing?
a. $764.50
b. $24,200
c. $31,200
d. $39,000
How do you get these answers?