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Salari Industries, a family-run small manufacturer, has adopted an ABC costing system. The following manufacturing activities, indirect manufacturing costs, and usage of cost drivers
Salari Industries, a family-run small manufacturer, has adopted an ABC costing system. The following manufacturing activities, indirect manufacturing costs, and usage of cost drivers have been estimated for the year: (Click the icon to view activities, total MOH costs, and cost drivers.) During May, Allan and Allison Salari machined and assembled Job 417. Allan worked a total of 12 hours on the job, while Allison worked 9 hours on the job. Allan is paid a $24 per hour wage rate, while Allison is paid $32 per hour because of her additional experience level. Direct materials requisitioned for Job 417 totalled $1,100. The following additional information was collected on Job 417: the job required 2 machine set-ups, 5 machine hours, and 2 quality control tests. 1. Compute the activity cost allocation rates for the year. 2. Complete the job cost record for Job 417. Requirement 1. Compute the activity cost allocation rates for the year. First, determine the formula to compute the allocation rate for the activity-based cost rate, and then calculate the rate for each activity. (Round your answers to the nearest whole dollar.) Total manufacturing overhead / Est. total use of cost driver Machine setups Machining Quality control $ 152,000 $ 1,020,000 $ 355,000 3,900 5,500 4,800 = Activity cost allocation rate = $ 39 per setup $ 185 per machine hour $ 74 per QC test Requirement 2. Complete the following job cost record for Job 417. (Round interim and final answers to the nearest whole dollar.) Job Cost Record Manufacturing JOB 417 Costs Direct material Direct labour.. 78 925 148 Manufacturing overhead. 1151 Total job cost.. Activities, total MOH costs, and cost drivers Activity Machine set-up. Machining. $ $ Estimated Total Manufacturing Overhead Costs 152,000 1,020,000 Estimated Total Usage of Cost Driver 3,900 set-ups 5,500 machine hours Quality control. $ 355,000 4,800 tests run Print Done
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