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Activity Set up Inspection Utilities Budgeted Cost $ 20,000 7,500 10,000 Budgeted Activity Usage 25 setups 5,000 parts inspected 5,000 machine hours (MH) Total

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Activity Set up Inspection Utilities Budgeted Cost $ 20,000 7,500 10,000 Budgeted Activity Usage 25 setups 5,000 parts inspected 5,000 machine hours (MH) Total $ 37,500 The following data pertain to Job 615. Direct materials Direct labor Overhead Setups Parts inspected Machine hours Required: $ 2,500 $ 3,500 2 setups 400 parts inspected 600 machine hours 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. Required 1 Required 2 Required 3 Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. Note: Round "Overhead rate" to 2 decimal places. Allocate overhead to Job 615 using plantwide rate Department Job 615 Plantwide Overhead Rate Machine Hours Used Overhead Allocated Total product cost of Job 615 Direct Materials Direct Labor Overhead Product Cost Job 615 $ 2,500 $ 3,500 _ $ 6,000 Required 1 Required 2 Required 3 Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. Note: Round "Activity Rate" to 2 decimal places. a. Compute overhead activity rates Setup Inspection Utilities Activity Activity Rate per setup per part per MH b. Allocate overhead to Job 615 based on actual activity usage Activity Setup Inspection Utilities Total allocated cost Allocated Cost $ 0 c. Total product cost of Job 615 based on activity-based costing Direct Materials Direct Labor Overhead Job 615 Product Cost $ 0

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