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Activity Based Costing MuNu company is in the process of switching to a Activity Based Costing system and has identified the following overhead costs and
| Activity Based Costing | |||
| MuNu company is in the process of switching to a Activity Based Costing system and has identified the following overhead costs and cost drivers for the upcoming year | |||
| Overhead Item | Expected Costs | Cost Driver | Quantity |
| Receiving Department Cost | $20,000 | Number of Purchase Orders | 800 |
| Machine Cost | $58,750 | Machine Hours | 11,750 |
| Inspection cost | $270,000 | Number of Inspections | 3,000 |
| Engineering | $125,000 | Engineering hours | 500 |
| Total | $473,750 | ||
| The following information was collected on three jobs that were completed in Q2 | |||
| Gaston | Hermine | Ian | |
| Direct materials | $24,000 | $12,000 | $38,000 |
| Direct labor | $12,800 | $8,400 | $14,000 |
| Units completed | 1200 | 800 | 1500 |
| Direct labor-hours | 640 | 420 | 700 |
| Machine Hours | 575 | 350 | 850 |
| Engineering hours | 8 | 5 | 10 |
| Number of Purchase Orders | 3 | 2 | 6 |
| Number of Inspections | 8 | 3 | 10 |
| For the year the company budgeted direct labor cost of $250,000, budgeted direct material cost of $880,000, and estimated labor hours of 10,000. | |||
| REQUIRED: | |||
| Determine the unit cost for each job using Activity Based Costing. (Round amounts to 2 decimal places.) | |||
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Accounting For Managers And Entrepreneurs
Authors: Charles T. Horngren
8th Edition
1269778684, 9781269778688
