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The Gardenview Corporation has identified the following overhead costs and activity drivers for next year: Expected Expected Overhead Item Cost Activity Driver Quantity Setup costs
The Gardenview Corporation has identified the following overhead costs and activity drivers for next year:
Expected | Expected | ||
Overhead Item | Cost | Activity Driver | Quantity |
Setup costs | $200,000 | Number of setups | 250 |
Ordering costs | 80,000 | Number of orders | 1,600 |
Maintenance | 400,000 | Machine hours | 2,000 |
Power | 40,000 | Kilowatt hours | 40,000 |
The following are two of the jobs completed during the year:
Job 6A | Job 8B | |
Direct materials | $3,000 | $4,000 |
Direct labor | $2,800 | $4,800 |
Units completed | 100 | 160 |
Direct labor hours | 50 | 80 |
Number of setups | 1 | 4 |
Number of orders | 4 | 5 |
Machine hours | 20 | 25 |
Kilowatt hours | 30 | 50 |
The company's normal activity is 2,000 direct labor hours. If the four activity drivers are used to allocate overhead costs, total overhead allocated to Job 6A would be
a.$5,030.
b.$4,830.
c.$5,533.
d.$5,630.
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