Question

Lamour Corporation is a job order costing company that uses activity-based costing to apply overhead to jobs. The following overhead activities were budgeted for the year.

Activity	Cost	Driver	Amount of driver
Setups	$240,000	Number of setups	6,000
Purchasing	160,000	Number of parts	20,000
Other overhead	300,000	Direct labor hours	80,000

The following information about the jobs was given for April.

	Job 101	Job 102	Job 103	Job 104
Balance 4/1	$64,900	$40,770	$30,500	0
Direct materials	54,000	37,900	25,000	11,000
Direct labor	80,000	38,500	43,000	21,000
Number of setups	40	10	30	200
Number of parts	300	80	400	500
Direct labor hours	5,000	2,400	5,200	1,200

By April 30, Jobs 102 and 103 were completed and sold. The remaining jobs were still in process.
What is the cost of job 102?

a.$127,210

b.$117,170

c.$86,440

d.None of these choices are correct.

Answer 1

Answer:- The cost of job 102 is $127210.

Explanation:-

Cost of Job 102
Particulars	Amount
	$
Balance 4/1	40770
Direct materials	37900
Direct labor	38500
Setups	10 setups*$40 per setup =400
Purchasing	80 parts*$8 per part =640
other overhead	2400 hours*$3.75 per hour =9000
Total cost	127210

Calculation of activity rate
Activity cost pool	Activity Measure	Estimated overhead cost (a)	Expected activity (b)	Activity rate (c=a/b)
		$		$
Setups	No of setups	240000	6000	40
Purchasing	No of parts	160000	20000	8
Other overhead	No of direct labor hours	300000	80000	3.75
	Total	700000