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Oxnard Company uses a volume-based costing system that applies overhead cost based on machine hours at $32 per machine hour. The company is considering adopting
Oxnard Company uses a volume-based costing system that applies overhead cost based on machine hours at $32 per machine hour. The company is considering adopting an activity-based costing system with the following data: Rate Activity Materials handling Lathe work Milling Grinding Testing Cost Driver Pounds of material Number of parts Number of machine hours Number of turns Number of units tested $1.60 1.30 7.50 0.60 18.00 The two jobs processed in the month of November had the following characteristics: Job B JobA $18,000 $6.000 1,000 $60,000 $12.000 3,000 1,500 40,000 800 Direct material Direct labor Pounds of material Number of parts Number of turns Number of machine hours Number of units in each job 500 10,000 400 100 200 All units tested All units tested Problem 2-3 The difference in total cost between ABC and the volume-based costing system for Job A is
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