Question
Company ABC has three production centers, Barrel, Wick, Assembly, and two service centers , Maintenance and General . The following data are available: a) Supervision
Company ABC has three production centers, Barrel, Wick, Assembly, and two service centers , Maintenance and General . The following data are available: a) Supervision costs of $ 8,400 in total is directly traceable to cost centers: $1,050 for Maintenance, $ 0 to General, $2,750 to Barrel, $2,400 to Wick and $2,200 to Assembly b) Depreciation of fixed assets of 5,400 in total is directly traceable to cost centers: $750 to Maintenance, $1,600 to General, $1,650 to Barrel, $ 900 to Wick and $500 to Assembly c) Direct materials of 13,200 in total directly traceable to cost centers:$ 3,700 to Maintenance $ 6,400 to General, $ 1,400 to Barrel, $ 1,000 to Wick and $ 700 to Assembly d) The overall Maintenance cost is allocated to the other centers in the following proportions; 32.7% to General, 40% to Barrel, 18% Wick, 9% to Assembly ( the rest) e) The overall General cost is allocated to the other centers in the following proportions; 23.47% to Barrel, 26.53% Wick, 50% to Assembly (the rest) f) The cost driver for the production centers is based upon the direct labour hours , total of 4,000 DLH, having 900 DLH for Barrel, 1,100 DLH for Wick and 2,000 DLH Assembly. g) A certain batch of pens, Job No. 307, required 10 direct labor hours in the barrel department, 15 direct labor hours in the wick department, and 35 direct labor hours in the assembly. Requirements: a) Compute the overhead rate to each production center and comment on the results b) Compute the total overhead cost of Job No. 307 and comment on the results
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