After reading an article about activity based costing in a trade journal for the furniture Industry, Santano Rey decides to analyze overhead cost at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of the company's overhead. Additional information about overhead follows. Activity Budgeted cost Budgeted Activity Usage Set up $ 26,700 38 setups Inspection 4,800 4,800 parts inspected Utilities 9,600 4,800 machine hours (MH) Total $ 41, 100 The following data pertain to Job 615. Direct materials $ 2,200 Direct labor $ 3,200 Overhead $ Setups 4 setups Parts inspected 400 parts inspected Machine hours 670 machine hours Required: 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 4,800 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. ( Compute total product cost of Job 615. Required 1 Required 2 Required 3 1 Machine hours 678 machine hours Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility fevel. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 4.800 mochine hours. Compute total product cost of Job 615 3. Assume Business Solutions uses activity based costing. (e) Compute overhead activity rates. (bAllocate overhead cost to Job 615. (a Compute total product cost of Job 615. Required 1 required 2 Required 3 Classify each of the three overhead activities as unit level, batch level, product level, or facility level Setup Batch level Inspection Facility level Unit level Us Required 2 > Required: 1. Classity 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 4,800 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. (Compute total product cost of Job 615 Required: Required 2 Required 3 Assume Business Solutions allocates overhead cost using a plantwide rate based on 4,800 machine hours, Compute total product cost of Job 615. (Do not round intermediate calculations, Round "Overhead rate" to 2 decimal places. Round other answers to nearest whole number.) Allocato overhead to Job 615 using plantwide rato Department Plantwide Machine Overhead Rato Hours Used Overhead Allocated Job 615 Total product cost of Job 615 Direct Materials Direct Labor Ovorhend Product Cost Job 615 Required 1 Required 3 > Required: Required 2 Required 3 1 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. (Round "Activity Rate to 2 decimal places) Der MH a. Compute overhead activity rates Activity Activity Ratu Setup per setup Inspection per part Utilities b. Allocate overhead to Job 615 based on actual activity Activity Allocated Cont Setup Inspection Utilities Total allocated cost $ G. Total product cost of Job 615 based on activity-based costing Job 515 Direct Materials Direct Labor Overhead Product Cont $ 0 Required 2
