Question & Answer: Clicker questions will be asked in class based on your completion of this preparation guide. Example in class question: What is th…..

Clicker Question Preparation Guide: Ch. 4 Clicker questions will be asked in class based on your completion of this preparation guide. Example in class question: What is the answer to Question 3) b.? You will not have time to complete this guide in class! 1. Milton Manufacturing has three departments (or activities) in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $80,000, $162,500, and $28,000, respectively. The expected annual use for each activity is 1,000 setups, 12,500 machine hours, and 875 inspections Compute the overhead rate for each activity Machine Setups Machining 2. Wilson Bradley & Associates, a law firm, uses Activity Based Costing for assigning overhead costs The following budgeted data for each of the activity cost pools is provided for the year 2016 Estimated Expected Use of Researching legal issues Meeting with clients Preparing legal documents $ 36,800 $ 1,797,600 800 research hours 8,400 professional hours 448,000 28,000 pages $2,282,400 During 2016 the firm experienced actual cost driver use as follows: 820 research hours, 8,550 professional hours, and prepared 27,600 document pages. a. Compute the total overhead applied during 2016 using ABC b. If actual overhead costs incurred during 2016 were $2,300,000 was overhead under- or overapplied during the year?

Clicker questions will be asked in class based on your completion of this preparation guide. Example in class question: What is the answer to Question 3) b.? You will not have time to complete this guide in class! Milton Manufacturing has three departments (or activities) in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $80,000, $162,500, and $28,000, respectively. The expected annual use for each activity is 1,000 setups, 12,500 machine hours, and 875 inspections. Compute the overhead rate for each activity. Wilson Bradley & Associates, a law firm, uses Activity Based Costing for assigning overhead costs. The following budgeted data for each of the activity cost pools is provided for the year 2016. During 2016 the firm experienced actual cost driver use as follows: 820 research hours, 8,550 professional hours, and prepared 27,600 document pages. a. Compute the total overhead applied during 2016 using ABC b. If actual overhead costs incurred during 2016 were $2,300,000 was overhead under- or overapplied during the year?

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