Question

Required information [The following information applies to the questions displayed below.] Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Indirect Materials Other Overhead Indirect Labor $390,000 Production Activity Grinding Polishing Product modification Providing power System calibration $185,000 650,000 $255,000 430,000 Additional information on the drivers for its production activities follows. Grinding Polishing Product modification Providing power System calibration 17,000 machine hours 17,000 machine hours 2,100 engineering hours 14,000 direct labor hours 450 batches Job 3175 210 units 500 MH Job 4286 2,625 units 5,000 MH Number of units Machine hours Engineering hours Batches Direct labor hours 34 eng. 36 eng 54 hours 30 batches 420 DLH hours 90 batches 3,780 DLH

Answer 1

1)
	Grinding			Unit Level
	Polishing			Unit Level
	product modification			Product level
	providing power			Facility level
	system calibration			Batch level
2,3 &4									Job 3175		Job 4286
Activity		OH cost	activity driver			Activity rate			activity driver	OH assigned	activity driver	OH assigned
Grinding & polishing		575000	17,000	machine hours		33.82	per machine hours		500	16912	5000	169118
product modification		650,000	2,100	engineering hours		309.52	per engineering hour		34	10524	36	11143
providing power		255,000	14,000	direct labor hours		18.21	per direct labor hour		420	7650	3780	68850
system calibration		430,000	250	Batches		1720.00	per batch		30	51600	90	154800
							Total overhead cost			86686		403911
							Number of units in job			210		2625
							Averge OH cost per unit			412.79		153.87
5)
	overhead costs		1,910,000	136.43	per direct labor hours
	Direct labor hours		14,000
	Product		DL Hours	Plntwide rate	total OH	units	OH cost per unit
	Job 3175		420	136.43	57300	210	272.86
	Job 4286		3780	136.43	515700	2625	196.46