75 Question 3 Fontus Ltd has identified the following overhead costs and cost drivers Cop Seed for next year Overhead Items Setups cost Ordering Cost Maintenance cost Power Cost Driver Number of setups Number of orders Machine Hours Budgeted cost 50,000 65000 60,000 54000 65,000 7500 50,000 Estimated activity 1800 3,500 1800 50 d. The following is one of the jobs completed during the year Direct materials Hourly rate Units completed DLH Activities Number of setups Number of orders Machine hours Job A $7000 15 350 540 10 20 650 Actual overhead $9.500 The company uses Direct Labour Hours as the unit level cost driver The estimated direct labour hours are 13,500 hours. 15 000 22 REQUIRED Part 1 1. Calculate the predetermined rate for the plant using FBC based on 2. Calculate total product cost using FBC based on Machine hours for each job 3. Calculate the unit cost for each Product 4. If the company has a mark up of 25%, what will be the selling 5. Is the overhead over-applied or under-applied? How will you adjust Cost of goods sold A Ad Part 2 6. Calculate the predetermined rate for the plant using ABC based on machine hours for each job 7. Calculate product cost under ABC. 8. Calculate the unit cost for each Product [ABC) 9. Is the overhead over-applied or under-applied under ABC? 10. Why is activity based costing considered more reliable than functional based costing? . CO2