Smith Industries manufactures a variety of custom productsproducts. 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 $ $900$ comma $000$$$900,000$ in total manufacturing overhead costs in the upcoming year and will use $10$ comma $00010,000$ machine hours.

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Part $1$

Requirement $1.$ Calculate the cost of Job $352$Job $352$ 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$)$

Part $2$

Total estimated MOH costs

$-$:

Estimated total machine hours

$=$

Plantwide manufacturing overhead rate

$$900,000$

$-$:

$10,000$

$=$

$$90$

Part $3$

Calculate the cost of Job $352$Job $352.$

Job Cost Record

Manufacturing

JOB $352$

Costs

Direct materials

$$17,500$

Direct labor

$700$

Manufacturing overhead allocated

$11,700$

Total job cost

$$29,900$

Part $4$

Requirement $2.$ Calculate the cost of Job $352$Job $352$ using$$ activity$-$based costing.

Begin by calculating the allocation rate for each activity. First determine the formula to compute the allocation rate in an$$ activity$-$based costing$$ system, then compute the rate for each activity. $($Abbreviations used: est.$=$ estimated,$$ MH$=$machine hours,$$ Mach.$=$Machine, Eng.$=$Engineering$)$

Activity cost

$-$:

$=$

allocation rate