Question
A plant has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows: Machine maintenance $120,000
A plant has two categories of overhead: maintenance and inspection.
Costs expected for these categories for the coming year are as follows:
Machine maintenance $120,000
Inspection $200,000
Total expected overhead: $320,000 (120,000 + 200,000 from above)
Expected activity levels for the coming year are as follows:
80,000 direct labor hours
40,000 machine hours
2,500 inspections
The following data has been assembled for use in developing a bid for a proposed job:
Direct materials | $1,500 |
Direct labor | $5,000 |
Machine hours | 400 |
Number of inspections | 6 |
Direct labor hours | 750 |
What would be the total cost of the potential using the activity-based costing and the appropriate cost drivers?
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