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Required information Problem 04-3A Applying activity-based costing LO P1, P3, A1, A2, C3 [The following information applies to the questions displayed below.] Craft Pro Machining
Required information Problem 04-3A Applying activity-based costing LO P1, P3, A1, A2, C3 [The following information applies to the questions displayed below.] Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Indirect Materials Other Overhead Production Activity Grinding Polishing Product modification Providing power System calibration Indirect Labor $390,000 500,000 $140,000 $ 260,000 540,000 Additional information on the drivers for its production activities follows. Grinding Polishing Product modification Providing power System calibration 13,000 machine hours 13,000 machine hours 1,900 engineering hours 17,000 direct labor hours 550 batches Number of units Machine hours Engineering hours Batches Direct labor hours Job 3175 120 units 400 MH 27 eng. hours 25 batches 460 DLH Job 4286 1,500 units 4,000 MH 34 hours 75 batches 4,140 DLH eng. Required: 1. Classify each activity as unit level, batch level, product level, or facility level. Answer is complete and correct. Grinding Polishing Product modification Providing power System calibration Unit level Unit level Product level Facility level Batch level > Required: 2, 3 & 4. Compute the activity overhead rates using ABC. Combine the grinding and polishing activities into a single cost pool. Determine overhead costs to assign to the above 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 and average overhead cost per unit to 2 decimal places. Round "overhead assigned to the nearest whole dollar.) Job 3175 Job 4286 Activity driver Overhead incurred assigned Activity Overhead Cost Activity Drivers Activity Rate Overhead assigned Activity driver incurred Grinding & Polishing Machine hours Product modification Engineering hrs. Direct labor hrs. Providing power System calibration batches Required: 5. If the company uses 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.) Overhead costs Direct labor costs Product Job 3175 Job 4286 per direct labor hour 17,000 Plantwide OH DL hours Total Overhead Cost rate 460 $ 4,140 s 0.00 $ OH Cost per unit Units Produced 120 1,500
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