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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 Construction labour Overhead Construction labour-hours $14,851,200 9,690,000 12,041,900 510,000 Kalagnanam recorded the following for the first quarter of 2021 for the three jobs that the company started and completed during the quarter: Direct materials Construction labour-hours School $ 835,375 68,850 Residential $1,002,450 40,800 Cinema $1,503,675 17,800 Required: 1. Compute the cost of each job using the current system of cost allocation. (Round intermediate calculations to 2 decimal places.) School Residential Cinema Direct Material Construction Labour Overhead Total cost $ 0 $ 0 $ 0 2. Tyler Case, the company's 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 Foundation laying Building construction Painting Finishing Amount $ 3,007,900 3,060,000 3,220,000 2,754,000 Activity Measure Foundation-laying hours Construction labour-hours Painting-hours Finishing-hours Activity Volume 429,700 510,000 560,000 765,000 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): Foundation-laying hours Painting-hours Schfool 55,000 73,920 Residential 53,290 46,200 Cinema 63,610 64,680 Finishing-hours 39,780 59,670 99,450 a. Calculate the activity rates for each of the four activities. (Round your answers to 2 decimal places.) Activity Rate Activity Foundation laying per FLH Building construction Painting per CLH per PH per FH Finishing 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.) School Residential Cinema Total cost 3. This part of the question is not part of your Connect assignment
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