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Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given that each construction job is different from any

Case Construction Company, a three-year-old business, provides contracting and construction services to a variety of clients. Given that each construction job is different from any other, company accountant Susan Kalagnanam decided that it was best to use a job-order costing system to allocate costs to the different jobs. She decided to use construction labour-hours as the basis for overhead allocation. In December 2020, she estimated the following amounts for the year 2021:

Direct materials $ 13,977,600
Construction labour 8,760,000
Overhead 10,073,500
Construction labour-hours 480,000

Kalagnanam recorded the following for the first quarter of 2021 for the three jobs that the company started and completed during the quarter:

School Residential Cinema
Direct materials $ 786,250 $ 943,500 $ 1,415,250
Construction labour-hours 64,800 38,400 16,800

Required:

1. Compute the cost of each job using the current system of cost allocation. (Round intermediate calculations to 2 decimal places.)

2. Tyler Case, the companys CEO, recently returned from a seminar on activity-based costing and instructed Kalagnanam to consider implementing the new system. As a first step, he instructed her to analyze the overhead costs for 2021. Through her research she was able to derive the following breakdown of the estimated overhead costs for 2021:

Activity Amount Activity Measure Activity Volume
Foundation laying $ 2,527,500 Foundation-laying hours 404,400
Building construction 2,520,000 Construction labour-hours 480,000
Painting 2,650,000 Painting-hours 530,000
Finishing 2,376,000 Finishing-hours 720,000

She also documented the following activity on the three jobs during the first quarter of 2021 (in addition to the construction labour-hours consumed by the three jobs):

Schfool Residential Cinema
Foundation-laying hours 51,780 50,160 59,860
Painting-hours 69,960 43,725 61,215
Finishing-hours 37,440 56,160 93,600

a. Calculate the activity rates for each of the four activities. (Round your answers to 2 decimal places.)

b. Calculate the total cost of each job using activity-based costing. (Do not round intermediate calculations and round your final answers nearest to whole number.)

3. This part of the question is not part of your Connect assignment.

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