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Calculate the overhead allocated to each project in 2017 using the activity- based costing system. 5-24 Department costing, service company. DLN is an architectural firm
Calculate the overhead allocated to each project in 2017 using the activity- based costing system.
5-24 Department costing, service company. DLN is an architectural firm that designs and builds build- ings. It prices each job on a cost plus 20% basis. Overhead costs in 2017 are sa, 100,000. Durs simple cost- allocates overhead costs to its jobs based on number of jobs. There were three jobs in 2017.0ne customer, Chandler, has complained that the cost and price of its building in Chicago was not competitive. As a result, the controller has initiated a detailed review of the overhead allocation to determine if overhead costs should be charged to jobs in proportion to consumption of overhead resources by jiobs. She gathers the following information: Quantity of Cost Drivers Used by Each Project Overhead Costs in 2017 Chandler Henry Manley 8,000 4,500 Cost Driver Department Design Engineering Construction Design department hours 3,000,000 Number of engineering hours 1,000,000 2,000 4,000 10,000 4,000 4100000 29000 27,000 26,000 Labor-hours $8,100,000 Step by Step Solution
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