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1 After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey wondered if it was time to critically
1 After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey wondered if it was time to critically analyze overhead costs at Business Solutions. In a recent month, Rey found that setup costs, inspection costs, and utility costs made up most of its overhead. Additional information about overhead follows. Activity Cost Driver $ 29,500 Setting up machines Inspecting components Providing utilities 25 batches 5,000 parts Skipped 17,000 19,500 5,000 machine hours. Overhead has been applied to output at a rate of 50% of direct labor costs. The following data pertain to Job 6.15. eBook 400 parts Direct materials Direct labor $ 6,300 Number of parts 7,300 Machine hours 600 machine hours Batches 2 batches. Required 1. What is the total cost of Job 6.15 if Business Solutions applies overhead at 50% of direct labor cost? 2. What is the total cost of Job 6.15 if Business Solutions uses activity-based costing? 1. Total manufacturing cost 2. Total manufacturing cost 10 points + Print References
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