Question

Question Help Fredenck Company usos ABC to account for its chrome wheel manufacturing rous Com m unaners have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup insertion of parts and finishing the budgeted activity costs for the upcoming year and the allocation bases are as follows: (Click the icon to view the budgeted costs and activity bases) Frederick Company expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 2,750 parts, require 15 setups, and consume 1,700 hours of finishing time Job 420 used 250 parts, required 2 setups, and consumed 100 finishing hours Job 510 used 450 parts, required 4 setups, and consumed 320 finishing hours Read the requirements Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity Activity cost allocation rate Mat handling per part Mach setup peetup Insertion Finishing Requirement 2. Compute the manufacturing overhead cost that should be assigned to Job 420 Activity MOH Cost Choose from any list or enter any number in the input fields and then continue to the next question.

Answer 1

1.

	Manufacturing overhead cost	/	Cost drivers	=	Activity cost allocation rate
Mat. Handling	$11,000	/	2,750 parts	=	$4	per part
Mach setup	$3,600	/	15 setups	=	$240	per setup
Insertion	$44,000	/	2,750 parts	=	$16	per part
Finishing	$76,500	/	1,700 hours	=	$45	per hour

2. Manufacturing overhead costs to be assigned to Job 420

Activity	MOH Cost
Materials handling ( $4 *250 parts )	$1,000
Machine setup ( $240 * 2 setups )	$480
Insertion of parts ( $16 * 250 parts )	$4,000
Finishing ( $45 * 100 hours )	$4,500
Total	$9,980

3. Manufacturing overhead costs to be assigned to Job 510

Activity	MOH Cost
Materials handling ( $4 *450 parts )	$1,800
Machine setup ( $240 * 4 setups )	$960
Insertion of parts ( $16 * 450 parts )	$7,200
Finishing ( $45 * 320 hours )	$14,400
Total	$24,360