Question

Wings Co. budgeted $555,600 manufacturing direct wages, 2,315 direct labor hours, and had the following manufacturing overhead: Overhead Cost Pool Materials handling Budgeted Budgeted Level for Overhead Cost Overhead Cost Cost Driver Driver Weight of $160,000 3,200 pounds materials Number of 13,200 390 setups setups 1,380 30,000 machine hours Machine hours Machine setup Machine repair Number of Inspections inspections Requirements for Job #971 which manufactured 4 units of product: 10,560 160 inspections Direct labor 20 hours Direct materials 130 pounds Machine setup 30 setups 15,000 machine Machine hours hours Inspections 15 inspections The total overhead of Job #971 under the ABC costing is: $95. $2,300. $9,200. $1,520. $380.

Answer 1

Overhead Cost Pool	Budgeted overhead Cost	Budgeted level for Cost Driver	Activity Measure	Activity Rate	Activity Used by Job #971	Overhead allocated to Job #971
Materials handling	160,000	3,200 pounds	Weight of materials	160,000/3,200 = $50	130 pounds	130 x 50 = 6,500
Machine setups	13,200	390 setups	Number of setups	13,200/390 = $34	30 setups	30 x 34 = 1,020
Machine repair	1,380	30,000 machine hours	Machine hours	1,380/30,000 = $0.05	15,000 machine hours	15,000 x 0.046 = 690
Inspection	10,560	160 inspections	Number of inspections	10560/160=$66	15 inspections	15 x 66 = 990
Total Cost				$150		$9,200.00

Total overhead cost of Job #971 is $9,200

third option is correct option.