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Chapter #17 - Activity Based Costing Problem #1 Midtown Inc. uses an activity based costing system contains the following six activity cost pools: Estimated Overhead
Chapter #17 - Activity Based Costing Problem #1 Midtown Inc. uses an activity based costing system contains the following six activity cost pools: Estimated Overhead Activity Cost Pool Costs Estimated Activity Indirect Labor $ 1, 100,000 100,000 Direct Labor Hours Machine processing 120,000 40,000 Machine Hours Machine setups 675,000 15,000 Setups Production orders 1,350,000 9,000 Orders Shipments 1,470,000 12,250 Shipments Product Testing 405,000 450 Products Total: $ 5,120,000 Activity data have been supplied for one of the jobs completed: JOB 485 Number of units produced 400 Direct Labor Hours 850 Machine Hours 1,475 Setups 5 Orders 8 Shipments 14 Products 2 Required: 1. Calculate the activity rates for each of the pools. 2. Determine the amount of overhead to be allocated to Job 485. 3. Calculate the amount of overhead per unit produced
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