Question
Marpole Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool Overhead Costs Cost
Marpole Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year: Cost Pool Overhead Costs Cost driver Activity level Supervision of direct labour $340,000 Direct labour hours 600,000 Machine maintenance $170,000 Machine hours 1,440,000 Facility rent $210,000 Square metres of area 100,000 Total overhead costs $720,000 The accounting records show the Bossman Job consumed the following resources: Cost driver Actual level Direct labour-hours 150 Machine-hours 1,700 Square metres of area 80 If Marpole Enterprises uses a simple cost system based on direct labour hours then what amount of indirect costs will be allocated to the Bossman job? If Marpole Enterprises uses an ABC system then what amount of indirect costs will be allocated to the Bossman job?
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