Maryville Manufacturing Maryville Manufacturing designs and builds custom mudroom storage benches. All of the mudroom storage benches are constructed with rustic hickory. Its budgeted manufacturing costs for the 2021 year are as follows. Overhead Cost Pools Amount Purchasing $ 45,000 Handling materials 50,000 Production (cutting, milling, finishing) 130,000 Setting up machines 85,000 Inspecting 60,000 Inventory control raw materials and finished goods) 80,000 Utilities 100,000 Total budgeted overhead costs $550,000 For the last 5 years, Maryville Manufacturing has been charging overhead to products on the basis of materials cost. For the year 2021, materials cost of $500,000 were budgeted. Jim Johnson, owner-manager of Maryville Manufacturing, recently directed his accountant, Ledger Kaufman, to implement the activity-based costing system that he has repeatedly proposed. At Jim's request, Ledger and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools. Overhead Cost Pools Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Inspecting Inventory control raw materials and finished goods) Utilities Activity Cost Drivers Number of orders Number of moves Direct labor hours Number of setups Number of inspections Number of components Square feet occupied Expected Use of Cost Drivers 500 5,000 65,000 1,000 4,000 40,000 50,000 Doug Russell, sales manager, has received an order for 12 custom mudroom storage benches from Homes by Kathy. At Doug's request, Ledger prepares costs estimates for producing 12 mudroom storage benches so Doug can submit a contract price per mudroom storage bench to Homes by Kathy. He accumulates the following data for the production of 12 mudroom storage benches. Direct materials $5,200 Direct labor $3,500 Direct labor hours 200 Number of purchase orders Number of material moves B2 Number of machine setups Number of inspections 20 Number of components 640 Number of square feet occupied 320 4 1. Compute the predetermined overhead rate using traditional costing with direct materials cost as the allocation base Budgeted Overhead Budgeted Direct Material $550,000 500,000 $1.10 Predetermined Overhead 2. Compute the total cost of manufacturing one mudroom storage bench using direct materials cost as the allocation base for manufacturing overhead. e Question please show stepbystep 1. Compute the predetermined overhead rate using traditional costing with direct materials cost as the allocation base Budgeted Overhead $550,000 Predetermined $1.10 Budgeted Direct Material 500,000 Overhead 2. Compute the total cost of manufacturing one mudroom storage bench using direct materials cost as the allocation base for manufacturing overhead. -Question please show step bystep
