Question

The estimated manufacturing overhead costs for Watts Window Company for 2010 are listed below: Work space $3,000,000 Quality control inspections ..... 1,000,000 Electric power 400,000 Materials handling 1,200,000 Machine setups 700,000 Watts Company assigns overhead costs to products using an activity based costing system. The following information pertains to the activity based cost drivers and overhead costs: Type of cost Activity based cost driver Work space $25,000 square feet Quality control inspections .. 160,000 number of inspections . Electric power ........ 250,000 kilowatt hours Materials handling 100,000 material moves Machine setups ********* 50,000 machine setups

Calculate the total amount paid by the local construction company

for the 5,000 windows.

Answer 1

calculation of cost per unit of Cost Diner Cash Aclista Cost Pool. cost Driven Volume (cost / unit Dimer 3000000 25000 of Sriver $120 Per squar feet work Squeere Space feet quality no of 이 control onspection inspection 1000000 160000 $6.25 Per noof inspection 400000 2S00DO Chemic power kilowatt hours $1.6 Rez kilowatt 1200000 100000 Material handling material moves $12 fer material morer Machine machine 700000 selep Setup 50000 $14 per machine setup

computation of overhead cost for for ainda (Note 2) Acliuſty Cosh costing rate/ Overhead gives Cost Driver cost unit 6$] work Space square feet $120 960000 [8000 x 20) $625 250 Quality no of Connsolenterin enspection Electric Kilowalt Power hour $16 $12 material handling maleval move [40x6:25) 4800 [ 3000 x16] 2400 [200X12) 700 [50x14) $14 machine schep machine Screep tofel 968150

Calculation of manufacturing cost Particular Direct material cost Direct labour cose total overhead cost (Note 2) Amt (ins) 20000 40000 bogo 968150 1028150 total manufacturing Cost fer 5000 windones total amount Paid Small contractor és by 140% of 10281 50 (Many antering Cost) z $ 1939410 and Cabour Direct material cost Assuming cost ceiven for all sooo windows. 59