! Required information Problem 17-3A 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 Labor $370,000 Indirect Materials other overhead $220,000 Production Activity Grinding Polishing Product modification Providing power System calibration 550,000 $245,000 530,000 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 20,000 direct labor hours 1,000 batches Job 3175 220 units Number of units Machine hours 400 MH 28 eng. hours 15 batches 480 DLH Engineering hours Batches Direct labor hours Job 4286 2,750 units 4,000 MH 26 eng. hours 45 batches 4,320 DLH Problem 17-3A Part 1 Required: 1. Classify each activity as unit level, batch level, product level, or facility level. Grinding Polishing Product modification Providing power System calibration O Required information Problem 17-3A 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 Indirect Labor $370,000 $220,000 Production Activity Grinding Polishing Product modification Providing power System calibration 550,000 $245,000 530,000 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 20,000 direct labor hours 1,000 batches Number of units Machine hours Engineering tours Batches Direct labor hours Job 3175 220 units 400 MH eng. 28 Job 4286 2,750 units 4,000 MH 26 eng. 26 hours 45 batches 4,320 DLH 15 batches 480 DLH Problem 17-3A Parts 2, 3 & 4 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 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 and average overhead cost per unit to 2 decimal places. Round "overhead assigned" to the nearest whole dollar.) Job 3175 Activity Job 4286 Activity driver Overhead incurred assigned Overhead Cost Activity Drivers Activity Rate Overhead assigned Activity driver incurred Machine hours Grinding & Polishing Product modification Engineering hrs. Providing power Direct labor hrs System calibration batches ! Required information Problem 17-3A 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 Indirect Labor $370,000 $220,000 Production Activity Grinding Polishing Product modification Providing power System calibration 550,000 $245,000 530,000 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 20,000 direct labor hours 1,000 batches Number of units Machine hours Job 3175 220 units 400 MH 28 eng. 15 batches 480 DLH Job 4286 2,750 units 4,000 MH 26 eng. hours 45 batches 4,320 DLH hours Engineering hours Batches Direct labor hours Problem 17-3A Part 5 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.) Product DL hours Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Job 3175 Job 4286
