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Fortunado Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials
Fortunado 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: (Click the icon to view the data.) Fortunado Company expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 3,000 parts, require 10 setups, and consume 1,500 hours of finishing time. (Click the icon for completed job data.) Read the requirements. Data Table Activity Materials handling .. Machine setup Insertion of parts Total Budgeted Manufacturing Overhead Cost Allocation Base $ 9,000 Number of parts 3,500 Number of setups 45,000 Number of parts 78,000 Finishing direct labor hours 135,500 -- Finishing $ Total. More Info Job 420 used 300 parts, required 4 setups, and consumed 130 finishing hours, Job 510 used 425 parts, required 6 setups, and consumed 320 finishing hours, Print Done Requirements 1. Compute the cost allocation rate for each activity. 2. Compute the manufacturing overhead cost that should be assigned to Job 420 3. Compute the manufacturing overhead cost that should be assigned to Job 510. Print Done
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