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 Indirect Labor $340,000 Other Overhead Indirect Materials $220,000 Production Activity Grinding Polishing Product modification Providing power System calibration 500,000 $200,000 520,000 Additional information on the drivers for its production activities follows. 1,600 engineering Grinding 14,000 machine hours Polishing 14,000 machine hours Product modification hours Providing power 14,000 direct labor hours System 1,400 batches calibration Job 3175 150 units 500 MM Number of units Machine hours Engineering hours Batches Direct labor hours Job 4286 1,875 units 5,000 MH 28 eng. hours 15 batches 4,598 DLH 3s eng. hours 5 batches 510 DLH Required: 2,3 & 4. Compute the activity overhead rates using ADC Combine the grinding and polishing activities into a single cost pool. Determine overhead costs to assign to the above jobs using ADC What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 42867 (found your activity rate and average overhead cost per unit to 2 decimal places. Round "overhead assigned to the nearest whole dollar) Job 3175 Activity driver Incurred Overhead Cost Activity Activity Rate Job 4286 Activity driver Overhead Incurred assigned Overhead assigned Grinding & Polishing Produot modification Activity Drivers Machine hours Engineering hrs Direct labor hors batches Providing power System calibration

Answer 1

Part-2,3,4
						Job 3175	Job 4286
Activity	Overhead Cost	Activity Drivers	Activity Rate	Activity driver incurred	Overhead assigned	Activity driver incurred	Overhead assigned
Grinding & Polishing	$560,000	14000	Machine hours	$40.00	per MH	500	$20,000	5,000	$200,000
Product modification	$500,000	1600	Eng. Hour	$312.50	per EH	35	$10,938	28	$8,750
Providing power	$200,000	14000	DLH	$14.29	per DLH	510	$7,286	4590	$65,571
System calibration	$520,000	1400	Batches	$371.43	per batch	5	$1,857	15	$5,571
						total overhead cost	$40,080		$279,893
						No. Of units in job	150		1875
						Average overhead cost per unit	$267.20		$149.28