(B) Himalaya Manufacturing has four groups of overhead. The four groups and expected overhead costs for each group for next year are listed below.

Maintenance $200,000

Material handling 32,000

Setups 100,000

Inspection 120,000

Presently, OH is applied by means of a predetermined OH rate, based on budgeted DLHs. 50,000 DLHs are budgeted for subsequent year.

The company has been requested to submit a proposal for a proposed job. The plant manager senses that accomplishment of this job would result in new business in future years. Proposals are based on full manufacturing cost + 20%.

Approximations for the proposed job are as follows:

Materials (DM) $6,000

Labour (DL) (1,000 hours) $10,000

# Materials moves 12

# Inspections 10

# Setups 2

# Machine hours 500

# Indicate numbers

Earlier, full manufacturing cost has been considered by assigning OH using a volume-based cost driver, DLHs. The plant manager has perceived of a new way of applying OH that uses cost pools and drivers.

Predictable activity for the four activity-based cost drivers that would be used are:

Setups 2,500

Quality-inspections 41,000

Machine-hours 20,000

Material-moves 1,600

Required:

1. Calculate the amount of OH that would be allocated to the proposed job if DLH is used as the volume-based cost driver.
2. Calculate the total cost of the proposed job.
3. Calculate the companys bid if the bid is based on full manufacturing cost +20%.
4. Calculate the amount of OH that would be applied to the proposed project if ABC drivers are used.
5. Calculate the total cost of the proposed job if ABC is used.
6. Calculate the companys bid if ABC is used and the bid is based on full manufacturing cost +20%.