Question
Olive Company makes dessert pies for national convenient food chains. Olive Company is considering using ABC costing and has the following activity cost pools and
Olive Company makes dessert pies for national convenient food chains. Olive Company is considering using ABC costing and has the following activity cost pools and information available:
Activities | Estimated Overhead Costs | Estimated Activity |
Material handling measured by batches | $251,000 | 2,000 batches |
Mixing measured by batches | $110,000 | 3,520 batches |
Packaging measured by units | $84,000 | 2,100,000 units |
Maintenance measured by # of setups | $15,000 | 260 setups |
Olive Company currently uses a plantwide overhead rate based on total estimated machine hours of 100,000 hours.
Based on their estimates for ABC costing, compute the allocated cost for all overhead costs for Job 607 using the following information about the job.
# of units in the job = 4,900
# of units in each batch = 980
# of setups required to complete the job = 1
# of machine hours = 220
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