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Crane Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways
Crane Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and widths. All are of white oak wood. Budgeted manufacturing overhead costs for the year 2022 are as follows. Overhead Cost Pools Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Inspecting Inventory control (raw materials and finished goods) Utilities Total budgeted overhead costs Amount Activity Cost Pools $75,000 Purchasing Handling materials 82,000 210,000 105,000 96,000 126,000 360,000 For the last 4 years, Crane Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2022, 100,000 machine hours are budgeted. $1,054,000 Jeremy Nolan, owner-manager of Crane Stairs Co., recently directed accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan's request, Bill and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools. Cost Drivers Number of orders Number of moves Estimated Use of Cost Drivers 600 8,000
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