MBC Problems due Wednesday

P5-2A. Calculating Activity-Based Costing Overhead Rates Assume that manufacturing overhead for Glassman Company in the previous exercise consisted of the following activities and costs:

Setup (1,000 setup hours..............................................................................................$288,000

Production scheduling (400 batches)...........................................................................$60,000

Production engineering (60 Change orders)................................................................$180,000

Supervision (2,000 direct labor hours)...........................................................................$56,000

Machine maintenance (12,000 machine hours)..........................................................$168,000

Total activity costs....................................................................................................$752,000

The Following additional data were provided for Job 845:

Direct material costs...........................................................................................................$7,000

Direct labor cost (5 Milling direct labor hours;

35 Finishing direct labor hours)................................................................................$1,000

Setup hours.............................................................................................................................5 hours

Production scheduling...........................................................................................................1 batch

Machine hours used (25 Milling Machine hours;

5 Finishing machine hours).........................................................................................30 hours

Production engineering........................................................................................................3 change orders

Required

a.Calculate the cost per unit of activity driver for each activity cost category.

b.Calculate the cost of Job 845 using ABC to assign the overhead costs.

c.Calculate the cost of Job 845 using the company-wide overhead rate based on machine hours calculated in P5-1A(a).

d.Calculate the cost of Job 845 using machine hour departmental overhead rate for the Milling Department and a direct labor hours overhead rate for the finishing department (see P5-1A(c)).

Please use excel template provided for P5-2 and P5-3 questions.

P5-3A. ABC-A Service Application Grand Haven is a senior living community that offers a full range of services including independent living, assisted living, and skilled nursing care. The assisted living division provides residential space, meals, and medical services (MS) to its residents. The current costing system adds the cost of all these services (space, meals, and MS) and divides by total resident days to get a cost per residents, Grande Haven's accountant recommended that an ABC system be designed to calculate more accurately the cost of MS provided to residents. She decided that residents should be classified into four categories (A, B, C,D) based on the level of services received, with group A representing the lowest level of service and D representing the highest level of service. Two costdrivers being considered for measuring MS Costs are number of assistancecalls and number of assistant contacts. A contact is registered each time an assistance professional provides medical services or aid to a resident. The accountant has gathered the following data for the most recent annual period:

ResidentAnnual ResidentAnnual AssistanceNumber of Assistance

Classification DaysHoursContacts

A..........................8,76015,00060,000

B...........................6,57020,00052,000

C..........................4,38022,50052,000

D..........................2,19032,50052,000

Total21,90090,000216,000

Other data:

Total cost of medical services for the period...................................................................$5,000,000

Total cost of meals and residential space.........................................................................$3,280,000

Required (Round answers and Intermediate Calculations to the Nearest Dollar)

a.Determine the ABC cost of a resident day for each category of residents using assistance hours as the cost driver.

b.Determine the ABC cost of a resident day for each category of residents using assistance contacts as the cost driver.

c.Which cost driver do you think provides the more accurate measure of the cost per day for a Grand Haven resident?

Please use template provided below to answer questions

Styles Editing Voice Baker College ACC 1020 Principles of Accounting II d for Problem 5-2 I a Activity cost calculations: include the formula here Set up cost Production scheduling cost Production engineering cost Supervision cost Machine operating cost b Direct materials Direct labor Manufacturing overhead cost Total Job 845 cost orders C Total Job 845 cost nine hours he Milling d e P5-1A(c)). Total Job 845 cost