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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
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?
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 $ 18,900 21 batches 4,400 4,400 parts $ 8,200 4,100 machine hours Driver Setting up machines Inspecting components Providing utilities Overhead has been applied to output at a rate of 50% of direct labor costs. The following data pertain to Job 6.15. Direct materials Direct labor Batches 1,600 Number of parts 440 parts 2,400 Machine hours 600 machine hours 3 batchesStep by Step Solution
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