Question
Thank You in advance! Question 1) Browning Manufacturing Company uses activity-based costing. The overhead budget for the period consisted of the following: Cost Pool
Thank You in advance! Question 1) Browning Manufacturing Company uses activity-based costing. The overhead budget for the period consisted of the following: Cost Pool Supervision Machine usage Machine setups Budgeted Amount $ 320,000 420,000 187,000 126,000 Design changes The potential allocation bases and their estimated amounts were as follows: Allocation Base Number of design changes Number of setups Machine hours Direct labor hours A. Budgeted Amount 35 110 6,000 10,000 B. Job LUVBUS2102 required $45,000 for direct materials, 2,000 direct labor hours, five setups, 800 machine hours, $20,000 for direct labor, and four design changes. Using the most appropriate allocation base for each pool, determine the cost of Job LUVBUS2102 using activity-based costing. Assume Browning uses a traditional plantwide rate to allocate overhead based on machine hours. Would Job LUVBUS2102 be over or undercosted (and by how much) under the traditional method (in other words, how much is it over or undercosted using one allocation rate instead of multiple like part A)?
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