Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The ZZ Top Company produces 2 types of jobs, standard jobs and special jobs. The company currently charges ALL overhead to jobs using direct labor
The ZZ Top Company produces 2 types of jobs, standard jobs and special jobs. The company currently charges ALL overhead to jobs using direct labor cost. The total overhead cost for 2019 is $210,000. During 2019, the company produced 1,000 standard jobs and 200 special jobs. Each standard job required $120 of direct materials and $80 of direct labor. Each special job required $150 of direct materials and $100 of direct labor. Compute the amount of OVERHEAD cost that would be charged to one special job. You will need this information for the next question, too. Refer to the information for the ZZ Top Company as given in question 19. Now the company wants to start using an activity-based costing system. This system would split the overhead into 4 cost pools. Pool 1 consists of $50,000 and is charged to jobs based on purchase orders. During the year, there are 600 purchase orders for standard jobs and 1,400 purchase orders for special jobs. Pool 2 consists of $24,000 of cost to set up Machine A, and is charged to jobs using setup hours. Each standard job requires one setup at 2 setup hours per job. Each special job requires one setup at 5 setup hours per job. Pool 3 consists of $30,000 and is made up of costs to run Machine B. Machine B is ONLY used to make special jobs. Pool 4 is generic overhead and will be charged to jobs using direct labor cost as was done in the first part of this problem. Using this activity-based cost system, compute the amount of overhead cost from that would be charged to ONE special job. Please put your answer in the following form: Cost Pool 1 Cost Pool 2 Cost Pool 3 Cost Pool 4 UTMI Editora
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started