Frederick Group uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows:

Frederick Group expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 2,900 parts, require 15 setups, and consume 1,800 hours of finishing time. Job 420 used 150 parts, required 4 setups, and consumed 120 finishing hours. Job 510 used 500 parts, required 5 setups, and consumed 320 finishing hours.

Requirements

1. Compute the cost allocation rate for each activity. 2. Compute the manufacturing overhead cost that should be assigned to Job 420. 3. Compute the manufacturing overhead cost that should be assigned to Job 510.

Activity Materials handling. Machine setup...... Insertion of parts... Finishing.. Total. Total Budgeted Manufacturing Overhead Cost Allocation Base $ 8,700 Number of parts Number of setups Number of parts Finishing direct labor hours 4,650 49,300 75,600 $138,250