Neal Construction manufactures and installs standard and custom-made cabinetlry for residential homes. The company estimates manufacturing overhead to be $200,000. Afler implementing activity-based costing (ABC), the company's accountant identified the following related information: Allocation Base Number of deliveries Number of inspcctions Hours of supervisor time Number of purchase orders Activity Material delivery and handling Inspections Supervision Purchasing Proportion of Overhead Cost 30% 25% 20% 25% The number of activities for standard and custom-made cabinets are as follows: Custom-made 100 400 2,200 1,000 Standard 200 Number of deliveries Number of inspections Hours of supervisor time Number of purchase orders 600 1,800 1,000 During the past year, Neal accepted a customcr crder for a set of custom-made cabinets that would require the following Dircct labor cost (25 hours at $15 per hour) Direct materials (wood) (900 ft at $3.00 per foot) Number of deliveries- Number of inspections Hours of supervisor time - Number of purchase orders $ 375 $2,700 3 5 5 3 How much overhead would be applied to the job if traditional costing (plantwide) using direct labor hours as a cost driver were used? Estimated total direct labor hours are 4,000 1 Using the plantwide method, what is the total product (manufacturing) cost for the above customer order? 2. Using activity based costing (ABC), what would be the total overhead applied to the above job? 3. 4. Using ABC, what is the total product (manufacturing) cost for the above customer order? Compare the two methods (plant-wide and ABC) and remark on the difference. 5. Scanned with CamScanner