Question
Required information Problem C-1A Applying activity-based costing LO P1, P2, A1, [The following information applies to the questions displayed below.] Craftmore Machining produces machine tools
Required information
Problem C-1A Applying activity-based costing LO P1, P2, A1,
[The following information applies to the questions displayed below.] Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.
| Production Activity | Indirect Labor | Indirect Materials | Other Overhead | |||||||||
| Grinding |
| $ | 330,000 |
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| Polishing |
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| $ | 135,000 |
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| Product modification |
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| 500,000 |
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| Providing power |
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| $ | 255,000 |
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| System calibration |
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| 590,000 |
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Additional information on the drivers for its production activities follows.
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| Grinding and Polishing | 9,000 | machine hours |
| Product modification | 2,200 | engineering hours |
| Providing power | 17,000 | direct labor hours |
| System calibration | 200 | batches |
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| Job 3175 | Job 4286 | ||
| Number of units | 180 | units | 2,250 | units |
| Machine hours | 300 | MH | 3,000 | MH |
| Engineering hours | 29 | eng. hours | 26 | eng. hours |
| Batches | 25 | batches | 75 | batches |
| Direct labor hours | 440 | DLH | 3,960 | DLH |
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2. Determine overhead costs to assign to the following jobs using ABC
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| Job 3175 | ----------Activity Rate---------- | Activity Driver Incurred | Overhead Assigned | |
| Grinding and Polishing | ||||
| Product modification | ||||
| Providing power | ||||
| System calibration | ||||
| Job 4286 | ----------Activity Rate---------- | Activity Driver Incurred | Overhead Assigned | |
| Grinding and Polishing | ||||
| Product modification | ||||
| Providing power | ||||
| System calibration | ||||
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