Question 1: The job costing system at Smith's Custom Framing has five indirect cost pools (purchasing, ma+A2:Q94terial handling, machine maintenance, product inspection, and packaging). The company is in the process of bidding on two jobs; Job 215, an order of 15 intricate personalized frames, and Job 325, an order of 6 standard personalized frames. The controller wants you to compare overhead allocated under the current simple job-costing system and a newly-designed activity-based job-costing system. Total budgeted costs in each indirect cost pool and the budgeted quantity of activity driver are as follows:

Budgeted Quantity Budgeted Overhead Activity Driver of Activity Driver Purchasing $ 70,000 Purchase orders processed 2,000 Material handling 87,500 Material moves 5,000 Machine maintenance 237,300 Machine-hours 10,500 Product inspection 18,900 Inspections 1,200 Packaging 39,900 Units produced 3,800 $453,600Job 215 Job 325 Number of purchase orders 25 3 Number of material moves 1D 4 Machine-hours 40 Bi} Number of inspections 9 3 Units produced 15 E Machining Department Finishing Department Manufacturing overhead costs $10,660,000 $7,372,000 Direct manufacturing labor costs $ 940,000 $3,800,000 Direct manufacturing labor-hours 36,000 145,000 Machine-hours 205,000 32,000Machining Department Finishing Department Direct materials used $15,500 $ 5,000 Direct manufacturing labor costs $ 400 $1,1,00 Direct manufacturing labor-hours 50 50 Machine-hours 130 20Home Insert Page Layout Formulas Data Review View A B C D 1 Roma Skincare 2 Operating Income Statement June, 2017 3 Units sold 15,000 4 Revenues $1,20,000 5 Cost of goods sold 6 Variable manufacturing costs $60,000 7 Fixed manufacturing costs $22,000 Total cost of goods sold $ 82,000 9 Gross margin $ 38,000 10 Operating costs 11 Variable marketing costs $ 6,000 12 Fixed marketing & admin costs $14,000 13 Total operating costs $ 20,000 14 Operating income $ 18,000