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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? |
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