Question

The job costing system at Shirley's Custom Framing has five indirect cost pools (purchasing, material handling, machine maintenance, product inspection, and packaging). The company is in the process of bidding on two jobs; Job 215, an order of 17 intricate personalized frames, and Job 325, an order of 6 standard personalized frames. The controller wants you to compare overhead allocated under the current simple job-costing system and a newly designed activity-based job-costing system. Total budgeted costs in each indirect cost pool and the budgeted quantity of activity driver are as follows. E: (Click the icon to view the cost and driver data.) i (Click the icon to view the job data.) Read the requirements. Requirement 1. Compute the total overhead allocated to each job under a simple costing system, where overhead is allocated based on machine-hours. (Round interim and final answers to the nearest cent.) Job 325 Job 215 386.80 Indirect cost allocated - simple costing system $ 1,547.20 Requirement 2. Compute the total overhead allocated to each job under an activity-based costing system using the appropriate activity drivers. (Round interim calculations to three decimal places and your final answers to the nearest cent.) Job 215 Total overhead allocated cost using the ABC costing sytems |

Answer 1

Job 2 15 Job 325 $724 $1163 | Total Overhead allocated cost using ABC casting systems working 2 Purchasing Material Handling Machine Maintenance Product Inspection Packaging Budgeted Activity Budgeted Overhead Overhead (A) Driver Quantity (6) Rate (A/B). $28600 Orders brocessed 2200 $13 $29,400 Material Moves 4900 $6 $120,000 Inspection Machine His 10,000 $12 $8000 Inspections 1600 $5 $7400 Unik broduced 3,700 $2 2 Overhead Costs Purchasing Material Handling Machine Maintenance Product Inspection Job 215 23X13 = 299 16x6 = 96 20 x 12 = 240 118 5 = 55 1782=34 $724 Job 325 11x13= 143 3 X 6 = 18 80x12=960 6x5=30 6 x 2 = 12 $1163 Packaging