Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A local picnic table manufacturer has budgeted these overhead costs: Purchasing $ 7 0 , 0 0 0 , Handling materials 3 3 , 3

A local picnic table manufacturer has budgeted these overhead costs:
Purchasing $70,000, Handling materials 33,333, Machine setups 70,500, Inspections 25,500, and Utilities 45,000.
They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown:
Cost Drivers are: Orders, Material moves, Machine setups, Number of inspections, and Square feet. Activities are, respectively: 700,1,334,15,000,5,000,180,000.
Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $20. Determine how much the job would cost given the following activities:
Order (units)1,000; Direct materials 112,700; Machine hours 15,200; Direct labor hours 5,300; Number of purchase orders 60; Number of material moves 800; Number of machine setups 100; Number of inspections 450; Number of square feet occupied 8,000.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Treasury Financial Manual Volume 1 Book 2

Authors: US Treasury

1st Edition

1790318432, 978-1790318438

More Books

Students also viewed these Accounting questions