Smith industries manutactures a variety of custom products. The company has traditionally used a plantwide manufacturing overhead rate based on machine hours to allocate manutacturing overhead to its products. The company estimates that it will incur $480,000 in total manulacturing overhead costs in the upcoming year and will use 8,000 machine hours Clck the icon to view the additional information aboul the hazardous waste disposal feos.) Expected usage and costs for manulacturing overhead activites for the upcoming year are as follows: (Click the icon to verw the expected usage and costs ) Duting the year, Job 356 is started and completed. Usage for this job follows: [Click the iban to viow the usage for Job 356. .] Read the Requirement 1. Calculate the cost of Job 356 using the tradtonal plantwide manulacturing overhead rate based on machine hours Begin by caloulating the plantwide overhead rate. Finst identsy the formula used to compute the plantwide overnead rate, then compute the rase. (Abbreviatons used. MOH * manutacturing overhead; mflg = manufacturing) 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. dustries manufactures a variety of custom products. The company has traditionally used ide manufacturing overhead rate based on machine hours to allocate manufacturing d to its products. The company estimates that it will incur $480,000 in total manufacturing id costs in the upcoming year and will use 8,000 machine hours. Expected usage and costs for manufacturing overhead a are as follows: fit (Click the icon to view the expected usage and costs. Data Table ear, Job 356 is started and completed. Usage 356.) Data table a variety or custom products. The company has traditionally used cturing overhead rate based on machine hours to allocate manufacturing ucts. The company estimates that it will incur $480,000 in total manufacturing he upcoming year and will use 8,000 machine hours. view the additional information about the hazardous waste disposal fees.) Expected usage and costs for manufacturing overhead ac are as follows: (Click the icon to view the expected usage and costs.) During the year, Job 356 is started and completed. Usage (Click the ichn to view the usage for Job 356.) Data table 310 pounds of direct materials at $20 per pound 40 direct labor hours used at $35 per labor hour 70 machine hours used 10 change orders 50 pounds of hazardous waste generated requirements. nachine hours. te, then compute the rate. (Abbreviations used: Requirements 1. Calculate the cost of Job 356 using the traditional plantwide manufacturing overhead rate based on machine hours. 2. Calculate the cost of Job 356 using activity-based costing. 3. If you were a manager, which cost estimate would provide you more useful information? How might you use this information
