Question

Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Indirect Labor $320,000 I ndirect Materials Other Overhead Production Activity Grinding Polishing Product modification Providing power System calibration $130,000 550,000 $ 200, eee 520, eee Additional information on the drivers for its production activities follows. Grinding Polishing Product modification Providing power System calibration 11,eee machine hours 11,000 machine hours 1,5ee engineering hours 21, eee direct labor hours 1,050 batches

Answer 1

Solution: 2,3,4 Job 3175 Job 4286 Activity Grinding & polishing Product modification Providing power System calibration Overhead Cost 4500001 550,000 200,000 520,000 Activity Drivers 11000 MH 1,500 Eng. Hrs 21,000 DLH 1050 batches 36 Activity driver Activity driver Overhead Activity Rate incurred Overhead assignedl incurred assigned 40.91 per MH 500 20455 5,000 204550 366.67 per Eng. Hrs 12467 13200 9.52 per DLH 3998 3780 35986 495.24 per batch 7429 22286 44349 276022 Number of units in job 170 2125 Average overhead cost per unit 260.88 129.89 Overhead costs* Direct labor hours Product Job 3175 Job 4286 1720000 81.90 per direct labor hour 21,000 DL hours Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit 420 81.90 34,400 170 202.35 3,780 81.90 309,600 2125 145.69 520000+130000+200000