Requirement 1. Calculate the cost of Job 354 using the traditional plantwide manufacturing overhead rate based on machine hou Begin by calculating the plantwide overhead rate. First identify the formula used to compute the plantwide overhead rate, then cor manufacturing) \begin{tabular}{l} C \\ \hline Jc \\ JC \\ \hline \end{tabular} Iring TC R ivity-based costing. Requirement 1. Calculate the cost of Job 354 using the traditional plantwide manufacturing overhead rate based on machine hours. Begin by calculating the plantwide overhead rate. First identify the formula used to compute the plantwide overhead rate, then compute the rate. manufacturinq) used: est. = estimated, MH=machine hours, Mach.=Machine, Eng.=Engineering) Activity cost Begin by calculating the allocation rate for each activity. First determine the formula to compute the allocation rate in an activity-based used: est. = estimated, MH= machine hours, Mach. =Machine, Eng. =Engineering) Activity cost Mach. maintenance per MH Eng. change orders per order Waste disposal Total actual activity allocation base per pound Calculate the cost of Job 354 using activity-based costing. Total actual activity cost pool Job Cost Record Manufacturing Total est. activity allocation base JOB 354 Costs Total est. activity cost pool More info Up to this point, hazardous waste disposal fees have been absorbed into the plantwide manufacturing overhead rate and allocated to all products as part of the manufacturing overhead process. Recently, the company has been experiencing significantly increased waste disposal fees for hazardous waste generated by certain products, and as a result, profit margins on all products have been negatively impacted. Company management wants to implement an activity-based costing system so that managers know the cost of each product, including its hazardous waste disposal costs. Sorrentino Industries manufactures a variety of custom products. The company has traditionally used a plantwide manufacturing overhead rate based on machine hours to allocate manufacturing overhead to its products. The company estimates that it will incur $1,725,000 in total manufacturing overhead costs in the upcoming year and will use 15,000 machine hours. Click the icon to view the additional information about the hazardous waste disposal fees.) Expected usage and costs for manufacturing overhead activities for the upcoming year are as follows: (Click the icon to view the expected usage and costs.) During the year, Job 354 is started and completed. Usage for this job follows: (Click the icon to view the usage for Job 354 .) Requirement 1. Calculate the cost of Job 354 using the traditional plantwide manufacturing overhead rate based on machine hours. Begin by calculating the plantwide overhead rate. First identify the formula used to compute the plantwide overhead rate, then compute the rate. (Abbreviations used: MOH = manufacturing overhead; mfg. = manufacturing) Calculate the cost of Job 354 using activity-based costing. Requirement 3. If you were a manager, which cost estimate would provide you more useful information? How might you use this information? The cost estimate based on the would provide more useful information because this cost estimate takes into account This information can be used to Total job cost Requirement 3 . If you were a formation? How might you use this information? The cost estimate based on the would provide more useful information because this cost estimate takes into account This information can be used to the machine hours used by each product the specific resources used by each product aate would provide you more useful information? How might you use this information? would provide more useful information because this cost estimate takes into account This information can be used to determine competitive direct labor rates Total job cost price jobs based on more accurate costs Requirement 3 . If you were a manager, which cost estimate would provide you I rmation? The cost estimate based on the schedule production this cost estimate takes into account This information can be used to Data table Data table
