Question

Required information (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 $310,000 Polishing $115,000 Product modification 450,000 Providing power $220,000 System calibration 580,000 Additional information on the drivers for its production activities follows. Grinding Polishing Product modification Providing power System calibration 16,000 machine hours 16,000 machine hours 1,600 engineering hours 17,000 direct labor hours 250 batches Job 3175 130 units 400 MII Number of units Machine hours Engineering houro Batches Direct labor hours 3ong. Job 4286 1,625 units 4,000 MH 26 eng. hours 45 batches 4,500 LII hours 15 batches 500 DL

Answer 1

Answer:

Computation of cost driver's : Amount in $

Grinding = 310000/ 16000 = 19.375

Polishing = 115000/16000= 7.1875 combined 26.5625

Production modification= 450000/1600 = 281.25

Power providing = 220,000/ 17000= 12.94

System callibtation= 580000/250 = 2320

Job 3175 abc total cost:

Machina hours = 400hrs *26.5625= 10610.5

Engineering = 31*281.25 = 8718.75

Batch = 15* 2320 = 34800

Direct labour = 500*12.94 = 6470

Total cost = 64199.25 units 130 = $493.85 per unit  

Job 4286:

Machina hours = 26.5625* 4000=106250

Engineering = 281.25*26= 7312.5

Batch = 2320* 45= 104400

Direct labour = 12.94 *4500= 58230

Total = 276192.5

Units = 1625 per unit = 169.96