Shipshape company makes 2 different types of boats, Ask an Expert

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ShipShape Company makes 2 different types of boats, commercial fishing and sail boats both for recreation and competition. The company consists of two different departments, design & engineering, and production. The company has decided to allocate overhead costs in each of the two costs pools. Data on estimated overhead follows:

Activity Driver Estimated Overhead Cost Sailboat Estimate Fishing Estimate
Product Design # of designs $180,000 22 designs 18 designs
Production Labor hours $945,000 4,000 hours 3,500 hours

If the company produces and sells 22 sailboats, and each sailboat requires 180 labor hours, how much overhead will be assigned to each sailboat produced?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9968734

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