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Neal Company manufactures computer workstations. The companys three activities and their overhead cost drivers follow. Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Fabrication

Neal Company manufactures computer workstations. The company’s three activities and their overhead cost drivers follow.

ActivityBudgeted CostActivity Cost DriverBudgeted Activity Usage
Fabrication$ 80,000Machine hours1,600machine hours
Assembly96,000Direct labor hours2,000direct labor hours
Inspection72,000Units inspected6,000units


Job 101’s actual activity usage along with a partial customer profitability report follow.

Machine HoursDirect Labor HoursUnits
Job 10125MH30DLH10

Profitability Report—Job 101
Sales$ 8,500
Cost of goods sold
Direct materials$ 1,940
Direct labor750
Overhead??
Gross profit?
Customer service costs500
Customer income?


Required:
1. 
Compute activity rates using activity-based costing.
2. Use the results from part 1 to allocate overhead cost to Job 101.
3. Complete the profitability report for Job 101.


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