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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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