Calculating Activity-Based Costing Overhead Rates (LO2, 3, 4)

Assume that manufacturing overhead for Glassman Company in the previous exercise consisted of the following activities and costs:

Setup OOOlSetUpIhOlrS) se eee eene en $144,000 Production scheduling (400 batches)........0..... 60,000 Production engineering (60 change orders)........ 120,000 Supervision (2,000 direct labor hours)............ 56,000 Machine maintenance (12,000 machine hours) ..... 84,000 OEY ZGININ CORIGy a one Gea cen boon: God aos. $464,000 The following additional data were provided for Job 845:

DirecimatenlalSiCOSt«=S cecsst asameiayarn $7,000 Direct labor cost (5 Milling direct labor hours;

35 Finishing direct labor hours) ................ $1,000 SC LUDINOULS Hara rerrars crsuers.n eo cess + aera 5 hours PLOCUGUOMESOMECLUIING pc cbse cit< envied sucess cessor 1 batch Machine hours used (25 Milling machine hours;

Mas MG mMmaGiitie:hOUNS) sea erveievs ale )s ee ener 30 hours PLOCUCTOMES OMOCKING! traralcesra aeveuaesttei aiaenerneeeaen e 3 change orders Required

a. Calculate the cost per unit of activity driver for each activity cost category.

b. Calculate the cost of Job 845 using ABC to assign the overhead costs.

c. Calculate the cost of Job 845 using the plantwide overhead rate based on machine hours calculated in the previous exercise.

d. Calculate the cost of Job 845 using a machine hour departmental overhead rate for the Milling Department and a direct labor hour overhead rate for the Finishing Department (see E6-20).