Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show the each calculate step, thank you A company has identified the following budgeted overhead costs and budgeted cost drivers for next year: Activity

Please show the each calculate step, thank you

A company has identified the following budgeted overhead costs and budgeted cost drivers for next year:

Activity Budgeted Activity cost Cost Driver Quantity
Material Handling $120,000 Number of moves 3,000
Ordering costs 70,000 Number of orders 50,000
Maintenance 200,000 Machine hours 80,000
Power 310,000 Kilowatt hours 310,000
Total Activity Cost $700,000
The following job completed during the year:
Job 400
Direct Materials $22,000
Direct labor $6,000
Units completed 4,000
Direct labor hours 300
Number of moves 40
Number of orders 30
Machine hours 250
Kilowatt hours 200
The company's normal activity is 70,000 direct labor hours for the year.
The company determines the selling price per job by using a markup of 18% above cost of the job
a. What is the plantwide rate based on direct labor hours as the cost driver.
b. Determine the overhead applied to Job 400 if a company is using the plantwide approach.
c. Determine the total cost of the job and unit cost of the job using direct labor hours to apply overhead.
Job =
Per Unit =
d. What is the selling price of the job using the plantwide approach to handle overhead?
e. If the company was thinking about using ABC, compute the activities rates for the 4 activities set out above and listed below.
f. Determine the overhead applied to Job 400 using the ABC approach.
g. Determine the total cost the job and the unit cost of the job using the ABC approach.
h. What is the selling price of the job using the ABC approach to handle overhead?
I. Which method produces the more accurate cost assignment? Why?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: Alvin Arens, Randal J. Elder

14th Global Edition

0273755013, 978-0273755012

More Books

Students also viewed these Accounting questions

Question

What are employee assistance programs and wellness programs?

Answered: 1 week ago