Question
Blackwelder Co. manufactures a variety of electric razors used by both men and women. The company's plant is partially automated. The company uses an activity-based
Blackwelder Co. manufactures a variety of electric razors used by both men and women. The company's plant is partially automated. The company uses an activity-based cost system. Listed below is cost driver information used in the product-costing system:
Overhead Cost pool | Budgeted Overhead Cost | Budgeted Cost Driver Level | Cost Driver |
Machine depreciation/ | $227,500 | 25,000 | Machine hours |
Maintenance Factory depreciation/ Utilities/insurance | 154,940 | 25,400 | Machine hours |
Product design | 665,720 | 35,600 | Hours in design |
Material purchasing/storing | 1,293,760 | 124,400 | Raw materials |
Two current product orders had the following requirements:
Mens Razors | Womens Razor | |
Units produced and sold | 26,000 | 30,000 |
Direct labor hours | 50 | 40 |
Pounds of raw materials | 980 | 1,120 |
Hours in design | 32 | 38 |
Machine hours | 85 | 60 |
Required: 1. Using ABC costing, how much overhead is assigned to the order for men's razors? 2. Using ABC costing, how much overhead is assigned to the order for women's razors?
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