Summary Information HQ HR IT Building Material Handling R$+$O Manufacturing

Direct Labour $($hours$)00000220,000237,422$

Direct Labour Costs $($$$)000006,600,0004,273,596$

Processing Time $($Processing hours$)0000000$

Headcount $($employees$)00000350180$

$-$

Computers $0000020400$

Value of Materials Processed $000003,500,00015,500,000$

Floorspace $($square feet$)00000940,050460,902$

Overhead Costs $($in $$)4,911,398919,855877,1995,186,492825,32516,179,25333,923,386$

Kay and Dee Manufacturing $($K$+$D$)$ has two business lines:

$$ Repair and Overhead $($R$+$O$)$: Repair of truck transmissions.

$$ Manufacturing: manufacturing of custom truck transmission parts

They also have five support departments. Major activities of each department are:

$$ Human Resources $($HR$)$: Payroll, HR staff, employee services, Union$/$Management relations.

$$ Facility: buildings, building maintenance and related building costs.

$$ Main Office $($HQ$)$: salaries for the President, VP$,$ and Finance department.

$$ Information Technology $($IT$)$: IT costs for the entire organization, including servers. Each part of the organization has different IT needs. The biggest user is Chemical Treatment $($for a legacy system that runs all of the chemical processing equipment$).$

$$ Material Handling: purchasing, storage and movement of materials within the facility

Other financial information is in Appendix A$.$ Overhead costs from the five overhead departments are allocated on the basis of direct labour hours.

The company is currently estimating the costs for a job that requires:

$10$ hours of R$+$O

$2$ hours of Manufacturing

$$ $$3,000$ in direct material costs

REQUIRED:

What is the cost for this job based on the current costing system.

What is the cost of this job based on Activity Based Costing.