Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
After reading an article about activity based costing in a trade journal for the furniture industry. Santana Rey wondered if it was time to critically
After reading an article about activity based costing in a trade journal for the furniture industry. Santana Rey wondered if it was time to critically analyze overhead costs at Business Solutions. In a recent month Santana found that setup costs, inspection costs, and utility costs made up most of its overhead. Additional information about overhead follows. Activity Setting up machines Inspecting components Providing utilities Cost $20,880 $ 5,100 $10.200 Driver 29 batches 5,1ee parts 5,1ee machine hours Overhead has been applied to output at a rate of 55% of direct labor costs. The following data pertain to Job 615. Direct materials Direct labor Batches Number of parts Machine hours $2,500 $3,700 6 batches 410 parts 650 machine hours Required: 1. Classify each of its three overhead activities as unit level batch level product level or facility level Setting up machines Inspecting components Providing utifies 2. What is the total cost of Job 615 if Business Solutions applies overhead at 55% of direct labor cost? Total cost 3. What is the total cost of Job 615 if Business Solutions uses activity-based costing? Total manufacturing cost
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started