Predetermined Overhead Allocation Rate Activity Allocation Base Number of parts $ 0.80 Assembly Programming Testing Number of direct labor hours 4.50 Number of tests 120.00 Total Direct Materials Costs Total Number of Parts Total Direct Labor Hours Total Number of Tests Job Job 721 21,500 2,400 810 36 Job 722 2,400 100 100 9 Using a job order costing system, Phyllo Computer Company estimated the total cost of two jobs as follows: (Click the icon to view the estimates under job costing.) Phyllo Computer Company is now considering using an ABC system. Information about ABC costs and records for the same two jobs for 2024 follow: |(Click the icon to view the ABC information.) |(Click the icon to view the records for two clients.) Read the requirements. Requirement 1. Compute the total cost for each job using activity-based costing (ABC). The cost of direct labor is $24 per hour. Activity-based costing: Job 721 Job 722 Direct costs: Indirect costs: Total costs Standard costing (single plantwide rate): Job 721 Job 722 Direct materials 21,500 $ 2,400 Direct labor* 19,440 8,748 2,400 1,080 Manufacturing overhead** $ 49,688 $ 5,880 Total cost * Direct labor calculated as follows: Hours per job X Direct labor cost per hour = Total direct labor costs per job 19,440 Job 721 810 $ 24 = $ $ Job 722 100 $ 24 = 2,400 ** Manufacturing overhead calculated as follows: Total direct labor Predetermined Manufacturing costs per job OH allocation rate = OH allocated Job 721 $ 19,440 X 45% II $ 8,748 Job 722 $ 2,400 45% = II $ 1,080 1. Compute the total cost for each job using activity-based costing. The cost of direct labor is $24 per hour. 2. Is the job cost greater or less than that computed under standard costing for each job? Why? 3. If Phyllo Computer Company wants to earn an operating income equal to 40% of the total cost, what sales price should it charge each of these two customers