Question

E4-2UA Similar to) Question Help insertion of parts, and West Horizons ABC to account for chrome whol manufacturing process Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handing machine se finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: Click the icon to view the budgeted costs and activity bases.) 3.100 parts require 25 setups, and consume 2.400 hours of finishing time West Hormon expects to pro 1,000 chrome wheels during the year. The wheels are expected to Job 420 used 100 parts, r ed and consumed 140 finishing hour Job 510 used 450 parts required 3 setups, and consumed 20 finishing hours Requirement.com 0 Resume 1. Compute the colocation for each activity 2. Compute the manufacturing overhead cost that should be assigned to Job 420 3. Compute the manufacturing overhead cost that should be assigned to Job 510

Answer 1

1 Schedule Showing computation of activity based overhead rates (per cost driver). → Activity cost allocation rate = Estimated Overhead cost / Expected allocation base (A) (B) Expected allocation Estimated Overhead base (A)/(B) Activity based overhead rate Activity cost pool Material Handling Machine Setup Insertion of parts Finishing 15,500 7,000 49,600 91,200 3100 parts 25 setup 3100 parts 2400 Finishing DLH 5.00 Per part 280.00 Per setup 16.00 per part 38.00 Per finishing DLH 163,300 2 Schedule showing cost assigned to Job 420 (A) Cost Assigned = Expected Cost driver x Activity based overhead rate (B) (A) x (B) Activity cost pool Job 420 Activity based Expected Cost driver overhead rate Cost Assigned Material Handling 100 $ 5.00 $ 500 Machine Setup 21 $ 280.00 $ Insertion of parts 100 $ 16.00 $ 1,600 Finishing 140 $ 38.00 $ 5,320 Total Overhead Assigned Is 7,980 560 3 Schedule showing cost assigned to Job 510 (B) (A) x (B) Cost Assigned = Expected Cost driver x Activity based overhead rate (A) Activity cost pool Job 510 Activity based Expected Cost driver overhead rate Material Handling 450.00 $ 5.00 Machine Setup 3.00 $ 280.00 Insertion of parts 450.00 $ 16.00 Finishing 320.00 $ 38.00 Total Overhead Assigned Cost Assigned $ 2,250 $ 840 $ 7,200 $ 12,160 22,450