Off the Beaten Path Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhead usage. Based on research the following information was gathered for the upcoming year: Machining Department Finishing Department Estimated Manufacturing Overhead by Department $800,000 $300,000 Trail Running Shoes 440,000 machine hours 8,000 direct labor hours Running Apparel 60,000 machine hours 72,000 direct labor hours Manufacturing overhead is driven by machine hours for the machining department and direct labor hours for the finishing department. At the end of the year, the following information was gathered related to the production of the trail running shoes and running apparel: Machining Department Finishing Department Trail Running Shoes 442,000 hours 7,500 hours Running Apparel 57,000 hours 73,000 hours How much manufacturing overhead will be allocated to the trail running shoes? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.) A. $735, 325 B. $736, 568 C. $275, 000 D. $1,100, 275

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Description: Off the Beaten Path Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhe

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter18: Activity-based Costing

Section: Chapter Questions

Problem 13E: Handbrain Inc. is considering a change to activity-based product costing. The company produces two...

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Off the Beaten Path Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhead usage. Based on research the following information was gathered for the upcoming year:

	Machining Department	Finishing Department
Estimated Manufacturing Overhead by Department	$800,000	$300,000
Trail Running Shoes	440,000 machine hours	8,000 direct labor hours
Running Apparel	60,000 machine hours	72,000 direct labor hours

Manufacturing overhead is driven by machine hours for the machining department and direct labor hours for the finishing department.

At the end of the year, the following information was gathered related to the production of the trail running shoes and running apparel:

	Machining Department	Finishing Department
Trail Running Shoes	442,000 hours	7,500 hours
Running Apparel	57,000 hours	73,000 hours

How much manufacturing overhead will be allocated to the trail running shoes? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

A. $735, 325

B. $736, 568

C. $275, 000

D. $1,100, 275

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