Question
Problem C-1A Applying activity-based costing LO P1, P2, A1, [The following information applies to the questions displayed below.] Craftmore Machining produces machine tools for the
Problem C-1A Applying activity-based costing LO P1, P2, A1,
[The following information applies to the questions displayed below.] Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.
Production Activity | Indirect Labor | Indirect Materials | Other Overhead | |||||||||
Grinding | $ | 330,000 | ||||||||||
Polishing | $ | 135,000 | ||||||||||
Product modification | 500,000 | |||||||||||
Providing power | $ | 255,000 | ||||||||||
System calibration | 590,000 | |||||||||||
Additional information on the drivers for its production activities follows.
Grinding and Polishing | 9,000 | machine hours |
Product modification | 2,200 | engineering hours |
Providing power | 17,000 | direct labor hours |
System calibration | 200 | batches |
Problem C-1A Part 4
Job 3175 | Job 4286 | |||
Number of units | 180 | units | 2,250 | units |
Machine hours | 300 | MH | 3,000 | MH |
Engineering hours | 29 | eng. hours | 26 | eng. hours |
Batches | 25 | batches | 75 | batches |
Direct labor hours | 440 | DLH | 3,960 | DLH |
4. If the company used a plantwide overhead rate based on direct labor hours, what would be the overhead cost for each unit of Job 3175? Of Job 4286? (Round OH cost per unit to 2 decimal places.)
5. Compare the overhead costs per unit computed in requirements 3 and 4 for each job. Which method more accurately assigns overhead costs? (Round your answers to 2 decimal places.)
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