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Gamble Products has adopted an ABC costing system. The following manufacturing activities, indirect manufacturing costs, and cost drivers have been identified: Data table The Job
Gamble Products has adopted an ABC costing system. The following manufacturing activities, indirect manufacturing costs, and cost drivers have been identified: Data table The Job Cost Record for Job \#624 revealed that direct materials requisitioned for the job totaled $1,140. The Job Cost Record also showed that direct labor for this job totaled 6 hours at a wage rate of $20 per hour. Other data collected on the resources used by Job \#624 included: (Click the icon to view the other data. Read the requirements. Requirements 1. Calculate the activity cost allocation rate for each of the five pools listed in the table. 2. Calculate the total cost of Job \#624 (use an ABC costing system). 3. Why would ABC provide a more accurate allocation of manufacturing overhead (MOH) than a plantwide rate? 4. Assume that Gamble Products used a traditional costing system rather than an ABC system. Its plantwide MOH rate would have been determined using direct labor (DL) hours as the allocation base. How much cost distortion would have occurred on this job? Requirement 3. Why would ABC provide a more accurate allocation of manufacturing overhead (MOH) than a plantwide rate? The cost estimate based on ABC would provide a more accurate allocation of MOH than a plantwide rate because this cost estimate take price jobs based on more accurate costs . distortion would have occurred on this job? Begin by calculating the plantwide overhead rate. First identify the formula used to compute the plantwide overhead rate, then compute the rate. (Round the rate to the nearest whole dollar.)
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