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A firm has three categories of budgeted overhead costs. Supervisor Salaries: $ 7 5 0 , 0 0 0 Equipment Lease: $ 1 9 0
A firm has three categories of budgeted overhead costs.
Supervisor Salaries: $
Equipment Lease: $
Maintenance: $
After an activitybased costing study, the firm develops the following percentage table.
Activity Cost Pool Preprocessing Processing Other
Supervisor Salaries
Equipment Lease
Maintenance
The firm uses machine hours budgeted hours as the activity driver for the Preprocessing activity.
The firm uses direct labor hours budgeted hours as the cost driver for the Processing activity.
If one of the firm's many jobs consumes $ in direct costs, machine hours and direct labor hours, how much total cost is allocated to this job?
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Step: 1
Answer To allocate the total cost to the job we need to calculate the costs for each activity based on the given percentages and then multiply those costs by the actual activity driver usage for the job 1 Preprocessing Activity Cost Supervisor Salaries 750000 25 187500 Total Preprocessing Cost 187500 2 Processing Activity Cost Supervisor Salaries 750000 25 187500 Maintenance 75000 40 30000 Total Processing Cost 187500 30000 217500 3 Other Activity Cost Since the Other activity doesnt have any budgeted costs we dont need to calculate anything for it Now lets calculate the cost ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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