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Production Activity Indirect Labor Indirect Materials Other Overhead Grinding $ 380,000 Polishing $ 115,000 Product modification 550,000 Providing power $ 235,000 System calibration 560,000 Additional
Production Activity | Indirect Labor | Indirect Materials | Other Overhead | |||||||||
Grinding | $ | 380,000 | ||||||||||
Polishing | $ | 115,000 | ||||||||||
Product modification | 550,000 | |||||||||||
Providing power | $ | 235,000 | ||||||||||
System calibration | 560,000 | |||||||||||
Additional information on the drivers for its production activities follows. |
Grinding | 15,000 | machine hours |
Polishing | 15,000 | machine hours |
Product modification | 1,300 | engineering hours |
Providing power | 14,000 | direct labor hours |
System calibration | 300 | batches |
Job 3175 | Job 4286 | |||
Number of units | 180 | units | 2,250 | units |
Machine hours | 350 | MH | 3,500 | MH |
Engineering hours | 27 | eng.hours | 22 | eng.hours |
Batches | 10 | batches | 30 | batches |
Direct labor hours | 500 | DLH | 4,500 | DLH |
Required: | |
1. | Classify each activity as unit level, batch level, product level, or facility level. |
2.
Required:
2, 3 & 4. | Compute the activity overhead rates using ABC. Form cost pools as appropriate. Determine overhead costs to assign to the following jobs using ABC. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286? (Round your activity rate to 2 decimal places.) |
3.
Required: |
If the company used a plantwide overhead rate based on direct labor hours, what is the overhead cost for each unit of Job 3175? Of Job 4286? (Do not round intermediate calculations. Round "OH Cost per unit" answers to 2 decimal places.) |
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