Question

?????406 Spring Summer 2 rt Page Layout Formulas Data Review Cut Arial 11 A-A Ed Wrap Text Copy" ??? 6 marks Awrays start your answer in column 8..COLUMN A IS FOR INSTRUCTOR USE ONLY You may use space below the question to show calculations Plaase put correct answer in the underlined space provided. ABC Company produces two types of parts, 1 and 2. Information pertaining to these two parts is as follows Part 1 Part 2 150.00 60.00 30 00 9.00 6.00 24.00 75.00 90.00 45.00 9.00 3.00 36.00 Units completed Direct labor hours Grinding hours Number of setups Inspection hours Number of orders received Prime costs S 217,500 $ 232,500 Additionally, the following overhead costs are reported for the activities associated with he two parts Setting up Inspecting Grinding Receiving 90,000 67,500 135,000 37,500 Required Compute the total overhead assigned to each part using activity- based costing method appropriate for the information provided a) (6 Marks) Total overhead Part 1 Total overhead Part 2 Marks 01 03 05 06 07 MacBa

Answer 1

Computation of total Overhead assigned to each part using ABC
Activities	Cost Driver	Activity Pool (1)	Cost Pool (2)	Overhead Rate 3=2/1	No. of Activity Part-1   (4)	OverheadCost Allocated to Part-1 (3X4)	No. of Activity Part-2 (5)	Overhead Cost Allocated to Part-2 (3X5)
Setting Up	No. of Setup	18	$90,000	$5,000	9	$45,000	9	$45,000
inspectin g	Inspection hour	9	$67,500	$7,500	6	$45,000	3	$22,500
Grinding	Grinding Hour	75	$135,000	$1,800	30	$54,000	45	$81,000
Receiving	No. of Order Received	60	$37,500	$625	24	$15,000	36	$22,500
Total Overhead			$330,000			$159,000		$171,000