Question

Required Information Problem 17-3A Applying activity-based costing LO P1, P3, A1, A2, C3 [The following information applies to the questions displayed below) Craft Pro Machining produces machine tools for the construction Industry. The following details about overhead costs were taken from its company records. Production Activity Indirect Labor Indirect Materials other Overhead Grinding $340,000 Polishing $190,000 Product modification 650,000 Providing power $200,000 Systen calibration 540,000 Additional Information on the drivers for its production activities follows Grinding Polishing Product modification Providing power Systen calibration 11,000 machine hours 13,000 machine hours 1,600 engineering hours 19,000 direct labor hours 1,050 batches Job 4286 2,250 units 3,000 Number of units Machine hours Engineering hours Batches Direct labor hours Job 3175 130 units 300 MH 32 eng. hours 30 batches 5ee DLH 32 ene. hours 9e batches 4,500 OLH Problem 17-3A Parts 2, 3 & 4 Required: 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 above jobs using ABC. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 42862 (Round your activity rate and average overhead cost per unit to 2 decimal places. Round "overhead assigned to the nearest whole dollar.)

Answer 1

Requirement (2,384) Activity Overhead Cost Grinding & polishing $ 530,000 Product modification $ 650,000 Providing power $ System calibration $ 540,000 Activity Drivers 13000 Machine hours 1,600 Engineering hrs. 19,000 Drect labor hrs. 1050 batches $ $ $ $ Activity Rate 40.77 per machine hour 406.25 per engineering hou 10.53 per direct labor hour 514.29 Per Batch 200,000 Job 3175 Activity driver incurred 300 32 500 30 Total Overhead Cost Number of units in job Average overhead cost per unit Job 4286 Overhead assigned Activity driver incurred Overhead assigned $12,231 3,000 $ 122,308 $13,000 32 $ 13,000 $5,263 4500 $ 47,368 $15,429 901 $ 46,286 $45,922 $ 228,962 180 2,250 $101.76 $255.12 Requirement (5) Overhead costs Direct labor hours Product Job 3175 Job 4286 $ 1,920,000 $ 101.05 per direct labor hour 19,000 DL hours Plantwide OH rate Total Overhead Cost 500 $ 101.05 $ 50,526 4,500 $ 101.05$ 454,737 Units Produced OH Cost per unit 1801 $280.70 2,250 $202.11 Note : Please comment down for any further clarifications