Question
Cornwell Products has adopted an ABC costing system to allocate its overhead costs. The following manufacturing activities and cost drivers have been identified: Activity Estimated
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Cornwell Products has adopted an ABC costing system to allocate its overhead costs. The following manufacturing activities and cost drivers have been identified:
Activity | Estimated OH Costs | Esimated amount of allocation base |
Machine setup | $180,000 | 2,000 setups |
Machining | $1,050,000 | 12,000 machine hours |
Polishing | $100,000 | 5,000 polishing cloths |
Quality control | $320,000 | 4,000 test runs |
Facility-level costs | $150,000 | 50,000 DL hours |
Total overhead costs | $1,800,000 |
The job cost record for Job #804 revealed the following:
Direct material costs: $1,250
Direct labor: 12 hours at a wage rate of $30/hr
1 machine setup
6 machine hours
4 polishing clothes
3 quaity control test runs
How much overhead would be allocated to Job #804 for the quality control activity?
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