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After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey decides to analyze overhead cost at Business Solutions.

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After reading an article about activity-based costing in a trade journal for the furniture industry, Santana 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 $ 14,910 21 setups Inspection 5,100 5,100 parts inspected Utilities 10,200 5,100 machine hours (MH) Total $ 30,210 Set up $ The following data pertain to Job 615. Direct materials $ 2,600 Direct labor $ 3,100 Overhead Setups 7 setups Parts inspected 500 parts inspected Machine hours 600 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 5,100 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 Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,100 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) Allocate overhead to Job 615 using plantwide rate Plantwide Machine Department Overhead Rate Overhead Allocated Hours Used Job 615 Total product cost of Job 615 Direct Materials Direct Labor Overhead Product Cost Job 615 Required 1 Required 2 Required 3 Assume Business Solutions uses activity-based costing. (a) Compute overt 615. (c) Compute total product cost of Job 615. (Round "Activity Rate" to a. Compute overhead activity rates Activity Activity Rate Setup per setup Inspection per part Utilities per MH b. Allocate overhead to Job 615 based on actual activity usage Activity Allocated Cost Setup Inspection Utilities Total allocated cost $ 0 c. Total product cost of Job 615 based on activity-based costing Job 615 Direct Materials Direct Labor Overhead Product Cost $ 0

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