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Shaker Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, handrails) permit installation of stairways of varying lengths and widths. All are of white oak wood. Budgeted manufacturing overhead costs for the year 2020 are as follows. Overhead Cost Pools Amount Purchasing $75,000 Handling materials 82,000 Production (cutting, milling, Tinishing) 220,000 Setting up machines 100,000 Inspecting 114,000 Inventory control (raw materials and finished goods) 126,000 Utilities 360,000 Total budgeted overhead costs $1,077,000 For the last 4 years, Shaker Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2020, 100,000 machine hours are budgeted. Jeremy Nolan, owner manager of Shaker Stairs Co., recently directed his accountant, Bil Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan's request, Bill and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools. Estimated Use of Activity Cost Pools Cost Drivers Cost Drivers Purchasing Number of orders 600 Handling materials Number of moves 8,000 Production (cutting, milling, finishing) Direct labor hours 100,000 Setting up machines Number of setups 1,250 Inspecting Number of inspections 6,000 CALORATOR MESSAGE HY INSTRUCTOR FULL SCREEN mons request, and the prooOon foruma One Towing cost orrvers and versage for the previously bugeces overra cost pools. PRINTER VERSION 4 BACK MEITE Activity Cost Pools Purchasing Handling materials Production (cutting, miling, finishing) Setting up machines Inspecting Inventory control (raw materials and finished goods) Utilities Cost Drivers Number of orders Number of moves Direct labor hours Number of setups Number of inspections Number of components Square feet occupied Estimated Use of Cost Drivers 600 8,000 100,000 1,250 6,000 168,000 90,000 Steve Hannon, sales manager, has received an order for 250 stairways from Community Builders, Inc., a large housing development contractor. At Steve's request, Bill prepares cost estimates for producing components for 250 stairways so Steve can submit a contract price per stairway to Community Builders. He accumulates the following data for the production of 250 stairways Direct materials $104,000 Direct labor $112,800 Machine hours 15,000 Direct labor hours 5,100 Number of purchase orders 60 Number of material moves 800 Number of machine setups 100 Number of inspections 450 Number of components 16,000 Number of square feet occupied 8,000 CALC Your answer is correct. Compute the predetermined overhead rate using traditional costing with machine hours as the basis. (Round ar Predetermined overhead rate 10.77 per machine hour LINK TO TEXT LINK TO TEXT VIDE x Your answer is incorrect. Try again. What is the manufacturing cost per stairway under traditional costing? (Round answer to 2 decimal places, e. Cost per stairway 1510.2 Your answer is correct. Calculate activity-based overhead rate for each activity. (Round answers to 2 decimal places, e.g. 12.25.) Activity Overhead Rate Purchasing 125 per order Activity Overhead Rate Purchasing 125 per order Handling materials 10.25 per move Production 2.2 per D/L hour Setting up machines 80 per setup Inspecting 19 per inspection Inventory control .75 per component Utilities 4 per sq. ft. LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. Calculate total overhead assigned under ABC. x Total overhead assigned 349.88 CALCULATOR LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR x Your answer is incorrect. Try again. Calculate total overhead assigned under ABC. Total overhead assigned 349.88 x Your answer is incorrect. Try again. What is the manufacturing cost per stairway under the proposed activity-based costing? (Round answer to 2 decimal pla Total manufacturing cost per stairway 1213.88 Click if you would like to Show Work for this question: Open Show Work
