Calculating Activity-Based Costing Overhead Rates Assume that manufacturing overhead for Glassman Company in the previous exercise consisted of the following activities and costs:

Setup (1,000 setup hours)	$156,000
Production scheduling (400 batches)	72,000
Production engineering (60 change orders)	120,000
Supervision (2,000 direct labor hours)	56,000
Machine maintenance (12,000 machine hours)	84,000
Total activity costs	$488,000

The following additional data were provided for Job 845

Direct materials costs	$10,000
Direct labor cost (5 Milling direct labor hours;
35 Finishing direct labor hours)	$4,000
Setup hours	5 hours
Production scheduling	1 batch
Machine hours used (25 Milling machine hours;
5 Finishing machine hours)	30 hours
Production engineering	3 change orders

a. Calculate the cost per unit of activity driver for each activity cost category.

Setup
Production scheduling cost
Production engineering cost
Supervision cost
Machine operating cost

b. Calculate the cost of Job 845 using ABC to assign the overhead costs.

Job 845
Direct materials cost
Direct labor cost
Manufacturing overhead costs:
Setup costs
Production scheduling
Production engineering
Supervision
Machine operations
Total cost

c. Calculate the cost of Job 845 using a company-wide overhead rate based on machine hours. Round rate to two decimal places. Company-wide overhead rate $Answer per machine hour Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed.

Job 845
Direct materials cost
Direct labor cost
Manufacturing overhead cost:
Total cost

d. Calculate the cost of Job 845 using a machine hour departmental overhead rate for the Milling Department and a direct labor hour overhead rate for the Finishing Department.

Milling Department manufacturing overhead	$356,000
Finishing Department manufacturing overhead	$132,000
Machine hours used
Milling Department	10,000 hours
Finishing Department	2,000 hours
Labor hours used
Milling Department	1,000 hours
Finishing Department	1,000 hours

Round rates to two decimal places, if needed. $Answer per Milling Dept. machine hour $Answer per Finishing Dept. direct labor hour

Use rounded overhead rates calculated above for calculations below. Round cost answers to the nearest whole number, when needed.

Job 845
Direct materials cost
Direct labor cost
Manufacturing overhead costs:
Milling Department
Finishing Department
Total cost

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