Question
Jardon painting paints the interiors and exteriors of homes and commercial buildings. The company uses and activity-based costing system for its overhead costs. The company
Jardon painting paints the interiors and exteriors of homes and commercial buildings. The company uses and activity-based costing system for its overhead costs. The company has provided the following data concerning its activity-based costing system.
Activity cost pool | Activity measure | Annual activity |
Painting overhead | Square meters | 30,000 square meters |
Job support | Jobs | 1,100 jobs |
Other | None | Not applicable |
The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
The company has already finished the first stage of the allocating process in which costs were allocated to the activity cost centers. The results are listed below:
| Painting | Job support | Other | total |
Painting overhead | $110,000 | $50,000 | $40,000 | $200,000 |
Office expense | 40,000 | 60,000 | 35,000 | 135,000 |
Total | 150,000 | $110,000 | $75,000 | $335,000 |
Required:
- Compute the activity rates (i.e., cost per unit of activity) for the painting and job support activity cost pools by filling in the table below. Round off all calculations to the nearest whole cent.
Job
Painting
Support
Total
- Prepare a product margin report for ONE job that involves painting 400 square meters and has direct materials cost of $1,000 and direct labor cost of $1,190. The total sales revenue from this job is $3,600.
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