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PA3 LO 6.2 A local picnic table manufacturer has budgeted these overhead costs Purchasing Handling materials Machine setups Inspections Utilities $70,000 33,333 70.500 25,500 45,000
PA3 LO 6.2 A local picnic table manufacturer has budgeted these overhead costs Purchasing Handling materials Machine setups Inspections Utilities $70,000 33,333 70.500 25,500 45,000 They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown Cost Driver Orders Material moves Machine setups Number of inspections Square feet Activity 700 1,334 15,000 5,000 180,000 Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $20. Determine how much the job would cost given the following activities: Order (units) Direct materials Machine hours Direct labor hours Number of purchase orders Number of material moves Number of machine setups Number of inspections Number of square feet occupied Activity 1,000 112,700 15,200 5,300 60 800 100 450 8,000 PA4, LO 6.2 Explain how each activity in this list can be associated with the corresponding unit or batch level provided A. Assembling productsunit level B. Issuing raw materials: batch level C. Machine setup batch level D. Inspection: unit level E. Loading the labeling machine: batch level F. Equipment maintenance batch level G Printing a banner: unit level H. Moving material batch level 1. Ordering a part batch level
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