Question
Metal Works Corporation has a significant level of manufacturing overhead. After preparing their budget for the next year, management expects the following overhead costs (the
Metal Works Corporation has a significant level of manufacturing overhead. After preparing their budget for the next year, management expects the following overhead costs (the cost driver for each overhead cost pool is also shown):
| Activity | Total Cost | Cost Driver | |
|---|---|---|---|
| Maintenance | $50,000 | Machine hours | |
| Materials receiving | 120,000 | Shipments received | |
| Machine setups | 20,000 | # of setups | |
| Inspection | 48,000 | # of inspections |
The expected activity for the year for various cost drivers is:
| Cost Drivers | Expected Activity |
|---|---|
| Direct Labor Hours | 80,000 |
| Machine-hours | 25,000 |
| Shipments Received | 10,000 |
| Setups | 200 |
| Quality inspections | 16,000 |
The company is considering accepting a significant production contract. Estimates for the contract are as follows:
| Contract Estimate | |
|---|---|
| Direct materials | $240,000 |
| Direct labor ( 1600 hours) | $320,000 |
| Number of material shipments received | 500 |
| Number of inspections | 800 |
| Number of setups | 20 |
| Number of machine-hours | 3,000 |
How much overhead should be allocated to the contract based on Activity-Based Costing? NOTE: Round all per-unit costs to nearest cent.
Select one:
a. $4,760
b. $9,600
c. $10,600
d. $16,400
e. None of the amounts listed.
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Management Reporting Und Behavioral Accounting Verhaltenswirkungen Des Berichtswesens Im Unternehmen
Authors: Andreas Taschner
2nd., 2nd. Auflage Aufl. 2019 Edition
3658234911, 978-3658234911
