Question
Farragut Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials
Farragut Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows:
Farragut Company expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 3,200 parts, require 25 setups, and consume 2,300 hours of finishing time.
Job 420 used 150 parts, required 5 setups, and consumed 120 finishing hours.
Job 510 used 450 parts, required 6 setups, and consumed 310 finishing hours.
please help :))))
Total Budgeted Manufacturing Activity Overhead Cost Allocation Base Materials handling $ 6,400 Number of parts Machine setup 9,000 Number of setups Insertion of parts ...... 54,400 Number of parts Finishing 89,700 Finishing direct labor hours $ 159,500 Total. $ = Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity. Activity cost (1) (2) allocation rate Mat. handling per part Mach setup per setup Insertion per part Finishing per hour Requirement 2. Compute the manufacturing overhead cost that should be assigned to Job 420. Activity MOH Cost Materials handling Machine setup Insertion of parts Finishing Total Requirement 3. Compute the manufacturing overhead cost that should be assigned to Job 510. MOH Cost Activity Materials handling Machine setup Insertion of parts Finishing TotalStep by Step Solution
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