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Customer last year. Comment on your solution. 5-29 Activity-based costing. The job-costing system at Shirley's Custom Framing has five indirect-cost pools (purchasing, material handling, machine
Customer last year. Comment on your solution. 5-29 Activity-based costing. The job-costing system at Shirley's Custom Framing has five indirect-cost pools (purchasing, material handling, machine maintenance, product inspection, and packaging). The com- pany is in the process of bidding on two jobs: Job 215, an order of 16 intricate personalized frames, and Job 325, an order of six standard personalized frames. The controller wants you to compare overhead allocated under the current simple job-costing system and a newly designed activity-based job-costing system. Total budgeted costs in each indirect-cost pool and the budgeted quantity of each activity driver are as follows. Purchasing Material handling Machine maintenance Product inspection Packaging Budgeted Overhead $ 25,600 32,900 150,000 11,200 12,400 $232,100 Activity Driver Purchase orders processed Material moves Machine-hours Inspections Units produced Number of inspections Units produced Number of purchase orders Number of material moves Machine-hours Information related to Job 215 and Job 325 follows. Job 215 incurs more batch-level costs because it uses more types of materials that need to be purchased, moved, and inspected relative to Job 325. Job 215 Job 325 5 3 80 26 14 20 12 16 Budgeted Quantity of Activity Driver 56 1,600 4,700 10,000 1,600 3,1003 1 1 point Using Machine Hours as a base, the overhead rate per machine hour is $ (use two decimal places) type your answer... 1 point Using machine hours as a simple job costing method of allocation, overhead allocated to job 215 would be $ type your answer... and to job 325 $ type your answer.... (use two decimal places and commas to separate thousands). 2 points Using activity based costing, the overhead allocated to job 215 would be $ type your answer... and the overhead allocated to job 325 would be $ type your answer.... (use two decimal places and separate 000s with a comma) -
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