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Bridgenorth Inc. uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials
Bridgenorth Inc. uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine set-up, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: (Click the icon to view the budgeted costs and activity bases.) Bridgenorth Inc. expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 3,000 parts, require 10 set-ups, and consume 1,500 hours of finishing time. Job 420 used 100 parts, required 5 set-ups, and consumed 140 finishing hours. Job 510 used 575 parts, required 6 set-ups, and consumed 370 finishing hours. Requirements Requirement 1 . Compute the cost allocation rate for each activity. First, identify the formula, and then compute the rate for each activity. Budgeted costs and activity bases Requirements 1. Compute the cost allocation rate for each activity. 2. Compute the MOH cost that should be assigned to Job 420 . 3. Compute the MOH cost that should be assigned to Job 510
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