Question

10 Part 2 of 3 3 points 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 $370,000 Polishing $180,000 Product modification 550,000 Providing power $230,000 System calibration 550,000 8 4:35.07 Skipped Additional Information on the drivers for its production activities follows. eBook Grinding Polishing Product modification Providing power Systen calibration 11,000 machine hours 11,000 machine hours 1,600 engineering hours 20,000 direct labor hours 500 batches Print Job 4286 2,000 units 3,000 MH Job 3175 160 units 300 MH 34 eng. hours 3e batches 410 DLH Number of units Machine hours Engineering hours Batches Direct labor hours 26 eng. hours 90 batches 3,690 DLH Required: 2, 3 & 4. Compute the activity overhead rates using ABC. Combine the grinding and polishing activities into a single cost pool. 10 < Prev 11 Next > of 14 !!! Mc Graw Hill

Answer 1

Requirement (2,384) Activity Grinding & polishing Product modification Providing power System calibration Overhead Cost $ 550,000 $ 550,000 $ 230,000 $ 550,000 Activity Drivers 11000 Machine hours $ 1,600 Engineering hrs. $ 20,000 Direct labor hrs. $ 500 batches $ Activity Rate 50 per machine hour 344 per engineering hour 12 per direct labor hour 1,100 Per Batch Job 3175 Job 4286 Activity driver incurred Overhead assigned Activity driver incurred Overhead assigned 300 $15,000 3,000 $ 150,000 34 $11,688 26 $ 8,938 410 $4,715 42,435 300 $33,000 90 $ 99,000 Total Overhead Cost $64,403 $ 300,373 Number of units in job 160 2,000 Average overhead cost per unit $402.52 $150.19 3690 $ Note : Please comment down for any further clarifications