Calculating Activity-Based Costing Overhead Rates Assume that manufacturing overhead for Goldratt Company consisted of the following activities and costs: Setup (1,000 setup hours) $118,000 Production scheduling (400 batches) 60,000 Production engineering (60 change orders) 150,000 Supervision (2,000 direct labor hours) 46,000 Machine maintenance (12,000 machine hours) 60,000 Total activity costs $434,000 The following additional data were provided for Job 845: Direct materials costs $7,000 Direct labor cost (5 Milling direct labor hours;35 Finishing direct labor hours) $1,000 Setup hours 5 hours Production scheduling 1 batch Machine hours used (25 Milling machine hours;5 Finishing machine hours) 30 hours Production engineering 3 change orders (a) Calculate the cost per unit of activity driver for each activity cost category. Setup $Answer 118 Production scheduling $Answer 150 Production engineering $Answer 2,500 Supervision $Answer 23 Machine maintenance $Answer 5 (b) Calculate the cost of Job 845 using ABC to assign the overhead costs. $Answer 17,310 (c) Calculate the cost of Job 845 using the plantwide overhead rate based on machine hours. (Round your answer to the nearest dollar.) $Answer 9,085 (d) Calculate the cost of Job 845 using a machine hour departmental overhead rate for the Milling Department ($32 per hour) and a direct hour overhead rate for the Finishing Department ($102 per hour). (Round your answer to the nearest dollar.)

Respuesta :

Answer:

a)

Setups: 118,000 / 1,000 = 118

Scheduling 60,000 / 400 = 150

engineering 150,000 / 60 = 2,500

Supervision 46,000 / 2,000 = 23

machine maintenance 60,000/ 12,000 = 5

b ) Total: 9,310

d ) $   4,370

Explanation:

a) We distribute the cost pool over the cost driver of each activity:

b) we assing the rates to the job:

Setups: 5 x 118 = $ 590

scheduling $ 150

engineering 3 orders x $ 2,500  = $ 7,500

supervision (5 + 35) DL x $23 = $ 920

Machine hours (25 + 5) x 5 = $ 150

Total: 9,310

(c)

we aren't given with the plantwide overhead rate and there is insufficient information to calculate with the given data. please check the question information

(d)

Milling department machine hours x overhead rate

25 machine hours x $32 =  $  800

+ Finishing Department labour hours x overhead rate

35 labor hours x $102 =   $   3,570  

                      Total            $   4,370

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