Question
The job costing system at Suzy's Custom Framing has five indirect cost pools (purchasing, material handling, machine maintenance, product inspection, and packaging). The company
The job costing system at Suzy's Custom Framing has five indirect cost pools (purchasing, material handling, machine maintenance, product inspection, and packaging). The company is in the process of bidding on two jobs; Job 215, an order of 15 intricate personalized frames, and Job 325, an order of 5 standard personalized frames. The controller wants you to compare overhead allocated under the current simple job-costing system and a newly designed activity-based job- costing system. Total budgeted costs in each indirect cost pool and the budgeted quantity of activity driver are as follows. (Click the icon to view the cost and driver data.) (Click the icon to view the job data.) Read the requirements in Requirement 1. Compute the total overhead allocated to each job under a simple costing system, where overhead is allocated based on machine-hours. Begin by calculating the overhead rate under the simple costing system. First select the formula, then enter the applicable amounts and calculate the rate. (Round your answer to the nearest cent. Abbreviations used: bgt budgeted, mach. machine, mat, material, purch. purchase, qty. quantity) Ac Budgeted overhead rate Simple costing system Now calculate the total overhead allocated to each job under a simple costing system. (Round your answer to the nearest cent.) Simple costing system Hom Indirect cost allocated Job 215 Job 325 Requirement 2. Compute the total overhead allocated to each job under an activity-based costing system using the appropriate activity drivers. (Round the allocation rates to three decimal places, X XXX. Abbreviations used: bgt. budgeted, mach. machine, maint. maintenance, mat material, purch. purchase, qty, quantity, Hom prod produced.) ARC allocation rate 10
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