Question

Question 5 1 pts 4A Portfolio Photography uses activity based casting to allocate overhead to individual clients (jobs). Portfolio Photography is working on three weddings during the current month (May), and total overhead is divided among four separate indirect cost pools: camera overhead (leases and maintenance on cameras), photo printing overhead (leases and maintenance on photo printers), computer-related overhead (leases/repairs on computers and subscriptions to commercial photo editing software), and other overhead costs (rent, insurance, etc.). The annual budgeted indirect cost pools and driver levels are provided in the table below. Estimated Activity Estimated Annual Quantity of Cost Driver Annual Cost Cost Driver Camera overhead $45,000 photographer-days 900 Photo printing overhead $15,000 number of photos printed 375,000 Computer-related overhead $80.000 photo processessing hours 8,000 Other Overhead Costs $63.000 photos taken 315.000 The following information about the wedding clients was given for May Garcia Wedding Smith Wedding Feng Wedding Beginning Balance (May 1 st) $13,000 $ $4,000 $0 Direct Labor $1,200 $2,900 $3,000 Direct Materials 5850 $1,000 $370 photographer-days 18 14 30 number of photos printed 600 1.000 800 20 photo processessing hours 100 photos taken 2,200 3.000 3,200 By the end of May, Portfolio Photography completed work on the Garcia and Smith weddings. The Garcias have already picked up their photos and paid, but the Smiths are planning to pick up their photos and pay later in June. Portfolio Photography charges clients a 15% markup over total costs. Assume that Portfolio Photography is still working on the Feng at the end of May and that only the three above weddings were worked on during May. A. Calculate the amount of camera OH allocated per "photographer- day" in the ABC system.

Answer 1

4a)

Camera OH allocated per ''Photographer day'' in ABC System
Estimated annual Camera OH cost	45000
Cost driver	Photographer days
Estimated annual Photographer days	900
Camera OH per "Photographer day"	50

4b)

Photo Printing Overhead cost allocated on May
Estimated annual Photo Printing OH Cost	15000
Cost driver	Number of Photos Printed
Estimated annual photo to be printed	375000
Photo Printing OH cost per Photo printed	0.04
Number of photos printed during may	2400
Total Photo Printing OH for May	96

4c)

Overheads Camera OH Photo Printing OH Computer Related OH Other Overhead Cost Overhead allocated to Smith Wedding during may Estimated annual Cost Units of Cost driver OH per cost driver unit Units of cost drivers for smith wedding in may Total OH 45000 900 50 14 700 15000 375000 0.04 1000 40 80000 8000 10 20 200 63000 315000 0.2 3000 600 Total Overhead Cost 1540

4d)

Revenue from Gracia Wedding during may
Cost	Estimated annual Cost	Units of Cost driver	OH per cost driver unit	Units of cost drivers for Gracia wedding in may	Total Cost
Direct Labour	NA	NA	NA	NA	1200
Direct Materials	NA	NA	NA	NA	850
Camera OH	45000	900	50	18	900
Photo Printing OH	15000	375000	0.04	600	24
Computer Related OH	80000	8000	10	100	1000
Other Overhead Cost	63000	315000	0.2	2200	440
Total Cost	4414
Add: Margin @ 15%	662
Portfolio Photography Charges for Gracia Wedding during May	5076