Jack Klett Equipment Company began the following jobs during August 2004:

Required:

a. Calculate the cost of each job using direct labor hours as the allocation base for all overhead.

b. Calculate the cost of each job using activity-based costing. Use direct labor hours as the allocation base for “other overhead cost.”

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Direct material Direct labor Direct labor hours Job 500 Job 600 $1,000 $1,000 $1,800 $3,000 120 200 10 50 50 0 2 200 17 75 Machine hours machine A Machine hours machine B Machine setups Material movements Estimated overhead cost for 2004: Depreciation machine A Depreciation machine B Machine setup cost Material handling cost Other overhead cost Total Estimated activities for 2004: Machine hours machine A Machine hours machine B Number of setups $ 50,000 300,000 75,000 100,000 80,000 $605,000 500 500 75 Number of material movements 5,000 Number of direct labor hours 10,000