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Problem 6 Oxnard Company uses a $20 per machine hour costing system that applies overhead cost based on machine hours at The company is considering
Problem 6 Oxnard Company uses a $20 per machine hour costing system that applies overhead cost based on machine hours at The company is considering adopting an activity-based costing system with the following deta Rate Pounds of material Number of parts Lathe work S 1.50 1.00 Milling Grinding Testing Number of machine hours 8.00 Number of turns 0.40 Number of units tested 15.00 The two jobs processed in the month of May had the following characteristics: Job A Direct material Direct labor 18,000 60,000 6,000 $12,000 900 3,000 450 1,500 Pounds of material Number of parts Number of tuns 10,000 40,000 Number of machine hours 800 375 80 200 All units tested Number of units in each job Using ABC, the cost per unit for Job A is: 1. a. $325.90 b. $125.00 c $425.00 d. $300.00 2 Using ABC, the cost per unit for Job B is: a. $157.00 b. $385.90 c $360.00 d. $517.00 The difference in total cost between ABC and the volume-based costing system for Job A is: 3. a. $18,400 b. $625 c. $2,500 d. $15,400
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