Materials handling. . . .

$9,000

Number of parts

Machine setup. . . . . . .

3,500

Number of setups

Insertion of parts. . . . .

45,000

Number of parts

Finishing. . . . . . . . . . . .

78,000

Finishing direct labor hours

Total. . . . . . . . . . . . .

$135,500

Farragut Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: (Click the icon to view the budgeted costs and activity bases.) Farragut Company expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 3,000 parts, require 10 setups, and consume 1,500 hours of finishing time Job 420 used 300 parts, required 2 setups, and consumed 100 finishing hours. Job 510 used 425 parts, required 5 setups, and consumed 320 finishing hours. Read the requirements. Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity Mat. handling Activity cost allocation rate per part per setup per part per hour Mach setup Insertion Finishing Requirement 2. Compute the manufacturing overhead cost that should be assigned to Job 420. Activity MOH Cost Materials handling Machine setup Insertion of parts Finishing Total Requirement 3. Compute the manufacturing overhead cost that should be assigned to Job 510. Activity MOH Cost Materials handling Machine setup Insertion of parts Finishing Total