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Jamesway Corporation makes two types of replacement fittings for heavy construction equipment-screws and bolts. Data regarding the two products follow: Direct Labour- Hours per
Jamesway Corporation makes two types of replacement fittings for heavy construction equipment-screws and bolts. Data regarding the two products follow: Direct Labour- Hours per Unit Annual Production: Screws Bolts 0.20 0.10 40,000 units 60,000 units 12:13 Additional information about the company follows: a. Screws require $8.20 in direct materials per unit, and bolts require $6.20. b. The direct labour wage rate is $40 per hour. c. Screws are more complex to manufacture than bolts, and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Direct labour-hours Estimated Overhead Cost $ 20,400 $176,000 Screws 80 Activity Bolts Total 40 120 4,000 0 4,000 $294,000 7,000 14,000 21,000
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