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Homework answers / question archive / Brief Exercise 4-12 Spin Cycle Architecture uses three activity pools to apply overhead to its projects

Brief Exercise 4-12 Spin Cycle Architecture uses three activity pools to apply overhead to its projects

Accounting

Brief Exercise 4-12

Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to allocate the overhead costs to the projects. The activities and related overhead costs are as follows: initial concept formation $47,760; design $286,000; and construction oversight $121,900. The cost drivers and estimated use are as follows.
 

Activities

 

Cost Drivers

 

Estimated Use of Cost
Drivers per Activity

Initial concept formation   Number of project changes   24
Design   Square feet   143,000
Construction oversight   Number of months   115


(a) Compute the predetermined overhead rate for each activity.

(b) Classify each of these activities as unit-level, batch-level, product-level, or facility-level.

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