LO 6.1Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000
direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the
predetermined overhead rate using:
A. Direct labor hours
B. Direct labor dollars
C. Machine hours
EA2.
LO 6.1Crystal Pools estimates overhead will utilize 250,000 machine hours and cost $750,000.
It takes 2 machine hours per unit, direct material cost of $14 per unit, and direct labor of $20 per
unit. What is the cost of each unit produced?
EA3.
LO 6.1A company estimated 100,000 direct labor hours and $800,000 in overhead. The actual
overhead was $805,100, and there were 99,900 direct labor hours. What is the predetermined
overhead rate, and how much was applied during the year?
EA4.
LO 6.1Cozy, Inc., manufactures small and large blankets. It estimates $350,000 in overhead
during the manufacturing of 75,000 small blankets and 25,000 large blankets. What is the
predetermined overhead rate if a small blanket takes 1 machine hour and a large blanket takes 2
machine hours?
EA5.
LO 6.2Identify appropriate cost drivers for these cost pools:
A. setup cost pools
B. assembly cost pool
C. supervising cost pool
D. testing cost pool
Activity-Based, Variable, and Absorption Costing
Sample Solution
his reading explores Pakeha ethnicity and the importance of social stratification in discussing the level of inequality and privilege present in New Zealand society.
Ballara (1986) defines the word Pakeha as the ‘Maori name for Europeans’. Many other contemporary Maori sources define the term as “White or New Zealander of European descent” (Moor, 2011 & Ngata, 2010). This reading makes note of the fact that there are advantages that belong to the dominant white majority in New Zealand however the advantages and the privileges are reinforced by its invisibility and is also disguised. McIntosh (2007) supports this statement: we should see white privilege as an “invisible package of unearned assets”. The norms and values of the White people, the ways in which they act and live serve as the basis by which non-White people are judged.
Pakeha acknowledge and support the symbolic nature and aspects of Maori culture; the incorporation of the Maori version in the national anthem, the Haka, the powhiri and educating people of Te Reo Maori. However, they oppose any possible potential aspects that may challenge and hinder the existing economic power structure such as ownership of Maori land, tertiary scholarships and awards for Maori students and so on. It raises questions and doubts about whether or not the Pakeha’s acknowledgment of the mere symbolic aspects of the Maori culture is actually genuine if they are not willing to share economic power and privileges.
The self-labelling as Pakeha represents their recognition of the cultural difference, and also displays the privileges that being a member of the majority group gives. In more recent years however, Pakeha ethnicity also served as a symbol of respect to the Maori in an attempt at acknowledging their “First Nation” status and the Treaty of Waitangi.
Ethnicity is a principle element of social stratification, and as a result, of inequality that is present within society. Maori, in comparison to the New Zealand population as a whole, were at an extreme disadvantage in terms of education and employment, but were also experiencing discrimination in institutions, workplaces and communities. The dominant majority Pakeha culture and social structure