Question

Activity Based Costing Activity Based Costing Help Save & Exit Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Indirect Tabor $320,000 Indirect Materials Other Overhead Part 2 of 3 Production Activity Grinding Polishing Product modification Providing power System calibration $135,000 600,000 $255,000 500,000 Additional information on the drivers for its production activities follows. Grinding Polishing Product modification Providing power Systen calibration 1,500 engineering hours 17,000 direct labor hours 400 batches Number of units Machine hours Engineering hours Batches Diregt labor hours Job 3175 200 units 550 MH 26 eng-hours 30 batehes 500 DLH Job 4286 2,500 units 5.500 MM J2 eng. hours 90 batehes 4.375 DLH 2, 3 & 4. Compute the activity overhead rates using ABC. Combine the grinding and polishing activities into a single cost pool. Determine overhead costs to assign to the following jobs using ABC. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286? (Round average overhead cost per unit to 2 decimal places.) Job 3175 Activity Rate Activity driver incurred Activity Overhead Cost Activity Drivers Machine hours Grinding & polishing < Prev 23 of 3 Next >

Answer 1

Answer to Reg 2, 3 & 4. Job 3175 Activity Grinding & Polishing Product Modification Providing Power System Calibration Overhead Cost 455,000 600,000 255,000 500,000 Activity Drivers 13,000 Machine Hours 1,500 Engineering Hrs. 17,000 Direct Labor Hrs. 400 batches Activity Rate 35 per Machine Hour 400 per Engineering Hr. 15 per Direct Labor Hr. 1,250 per batch Activity driver incurred 550 26 500 30 Total Overhead Cost Number of Units in Job Average Overhead Cost per Unit Job 4286 Overhead Actvity driver Overhead assigned incurred assigned 19,250 5,500 192,500 10,400 32 12,800 7,500 4,375 65,625 37,500 90 112,500 74,650 383,425 200 2,500 373.25 153.37 Answer to Req 5. Overhead Costs Direct Labor Hours | 1,810,000 106.47 per Direct Labor Hours 17,000 Plantwide Units DL Hours OH Rate Total Overhead Cost Produced 500 106.47 53,235 200 4,375 106.47 465,806 2,500 Product Job 3175 Job 4286 OH Cost per Unit 266.18 186.32