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Tinsley, Inc., produces high-end party favors for corporate events. very labor intensive process and as such, the company currently uses direct labor hours to allocate
Tinsley, Inc., produces high-end party favors for corporate events. very labor intensive process and as such, the company currently uses direct labor hours to allocate overhead costs. However, during a recent meeting with a large well known national client, an accounting student suggested they try using activity based costing. The firm currently collects the following information: The firm has two upcoming jobs and would like to see how the costs vary when using ABC and traditional costing. The cost of direct materials is $8.25 per guest and the cost of direct labor is $15 per direct labor hour. 1. Calculate the PDOH using traditional costing. A. $6.40/ direct labor hour B. $3.77/mile C. $11.30/ direct labor hour D. $10.00/mile Use the following chart to answer questions 2-4 Tinsiey, Ine. uses traditional costing. 2. The cost for Direct Materials for the Miller Co, job is: A. $6,187.50 B. $41,250.00 C. $4,237.50 D. $35,000.00 3. The total event cost for Miller Co. using traditional costing is: A. $28,250.00 B. $81,187.50 C. $113,187.50 D. $103,250.50 4. The total event cost for Coors Co. using traditional costing is: A. $14,125 B. $86,500 C. $70,500 D. $51,625
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