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1 After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey decides to analyze overhead cost at
1 After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey decides to analyze overhead cost at Business Solutions. In a recent month, Santana found that setup costs, Inspection costs, and utility costs made up most of the company's overhead. Additional information about overhead follows. Activity Set up Inspection Utilities. Total Budgeted Cost $ 25,230 4,500 9,000 $ 38,730 The following data pertain to Job 615. Direct materials Direct labor Overhead Setups Parts inspected Machine hours) Required: $ 3,000 $3,300 Budgeted Activity Usage 29 setups 4,500 parts inspected 4,500 machine hours (MH). 3 setups 578 parts inspected 550 machine hours 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 4,500 machine hours. Compute total product cost of Job 615. 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. Required 1 Required 2 Required 3 Classify each of the three overhead activities as unit level, batch level, product level, or facility level. Setup Inspection Utilities Hered Required 2 > 1 Activity Set up Inspection Utilities Total Budgeted Cost $ 25,230 4,500 Budgeted Activity Usage 29 setups 4,500 parts inspected 9,000 4,500 machine hours (MH) $ 38,730 The following data pertain to Job 615. Direct materials Direct labor Overhead Setups Parts inspected Machine hours Required: $ 3,000 $ 3,300 3 setups 570 parts inspected 550 machine hours 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 4,500 machine hours. Compute total product cost of Job 615. 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. Required 1 Required 21 Required 3 Assume Business Solutions allocates overhead cost using a plantwide rate based on 4,500 machine hours. Compute total product cost of Job 615. (Do not round intermediate calculations. Round "Overhead rate" to 2 decimal places. Round other answers to nearest whole number.) Allocate overhead ob 615 using plantwide rate Department Job 615 Plantwide Overhead Rate Machine Hours Used Overhead Allocated Total product cost of Job 615 Job 615 Direct Materials Direct Labor Overhead Product Cost 1 Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 4,500 machine hours. Compute total product cost of Job 615 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. Required 1 Required 2 Required 3 Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. (Round "Activity Rate" to 2 decimal places.) Compute overhead activity rates Activity + Activity Rate per setup per part per MH Setup Inspection Utilities b. Allocate overhead to Job 615 based on actual activity usage Activity Setup Inspection Uuities Allocated Cost Total allocated cost Total product cost of Job 615 based on activity-based costing Direct Materials Job 615 Direct Labor Overhead Product Cost
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