Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Indirect Labor $33e, eee Indirect Materials Other Overhead $210,eee Production Activity Grinding Polishing Product modification Providing power System calibration 550,888 440, eee Additional information on the drivers for its production activities follows. Grinding Polishing Product modification Providing power System calibration 17,000 machine hours 17,eee machine hours 1,4ee engineering hours 14,eee direct labor hours 450 batches Required: 1. Compute the activity overhead rates using ABC. Form cost pools as appropriate. Answer is complete and correct. Activity 1 Overhead Cost $ 540,000 550.000 Grinding and Polishing Product modification $ Activity Drivers 17.000 1400 Machine hours Engineering Activity Rate 31.76 per machine hour per engineering Required: 1. Compute the activity overhead rates using ABC. Form cost pools as appropriate. Answer is complete and correct. Activity Grinding and Polishing Product modification Overhead Cost $ 540,000 Activity Drivers 17,000 $ $ $ 550,000 1,400 Machine hours Engineering hrs. Direct labor hrs. batches Activity Rate 31.76 per machine hour 392.86 per engineering hour per direct labor 16.43 hour 977.78 per batch Providing power 230,000 440,000 14,000 450 System calibration $ Number of units Machine hours Engineering hours Batches Direct labor hours Job 3175 180 units 550 MH 30 eng. hours 10 batches 460 DLH Job 4286 2,258 units 5,508 MH 26 eng hours 30 batches 4,148 DLH 2. Determine overhead costs to assign to the following jobs using ABC. (Do not round your intermediate calculations. Round activity rate answers to 2 decimal places and other answers to nearest whole dollar amount.) Job 3175 - Activity Rate- Overhead Assigned Activity Driver Incurred 550 $ Grinding and Polishing Product modification Providing power System calibration $ 31.76 per machine hour $ 450.00 per engineering hour $ 16.43 per direct labor hour $ 977.78 per batch Total overhead cost 17,468 13,500 7,558 9,778 460 101 48,304 Job 4286 Activity Rate- Overhead Assigned Activity Driver Incurred 5,500 S s Grinding and Polishing Product modification Providing power System calibration $ 31.76 per machine hour 450.00 per engineering hour 16.43 per direct labor hour 977.78 per batch Total overhead cost 174,680 11,700 68,020 29,333 283,733 $ Additional information on the drivers for its production activities follows. le Grinding Polishing Product modification Providing power System calibration 17,eee machine hours 17,eee machine hours 1,400 engineering hours 14,000 direct labor hours 450 batches Job 4286 Number of units Machine hours Engineering hours Batches Direct labor hours Job 3175 180 units 550 MH 30 eng. hours 10 batches 460 DLH 2,250 units 5,500 MH 26 eng. hours 30 batches 4.140 DLH 3. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286? (Round average overhead cost per unit to 2 decimal places.) Answer is complete but not entirely correct. Total overhead cost Number of units in job Average overhead cost per unit Job 3175 48,304 180 $ 268.36 Job 4286 283,733 2.250 $ 126.10 4. If the company used a plantwide overhead rate based on direct labor hours, what would be the overhead cost for each unit of Job 3175? Of Job 4286? (Round OH cost per unit to 2 decimal places.) Direct materials Product DL hours Total Overhead Cost Units Produced OH Cost per unit Job 3175 Plantwide OH rate 0.00 0.00 Job 4286 $ $ Number of units Machine hours Engineering hours Batches Direct labor hours Job 3175 180 units 550 MH 38 eng. hours 10 batches 450 DLH Job 4286 2.250 units 5,500 MH 26 eng. hours 3 batches 4,140 DLH 5a. Compare the overhead costs per unit computed in requirements 3 and 4 for each job. (Round your answers to 2 decimal places.) Job 4286 Average Overhead Cost Job 3175 Using ABC Using plantwide rate
