Utica Manufacturing (UM) was recently acquired by MegaMachines, Inc. (MM), and organized as a separate division within the company. Most manufacturing plants at MM use an ABC system, but UM has always used a traditional product costing system. Bob Miller, the plant controller at UM, has decided to experiment with ABC and has asked you to help develop a simple ABC system that would help him decide if it was useful. The controller's staff has identified costs for the first month in the four overhead cost pools along with appropriate cost drivers for each pool.

CoursHeroTranscribedText: Cost Pools Costs Incoming inspection $ 261,333 Production 1,453,333 Machine setup 825,333 Shipping 483,333 Activity Drivers Direct material cost Machinehours Setups Units shipped Incoming inspection % of material dollars Production per machine-hour Machine setup per setup Shipping per unit Total Total Total Total Total Total Number of units produced and shipped direct material costs direct labor costs machinehours number of setups pounds of material direct laborhours Products 308 $ 60,000 $168,000 40,000 50 17,200 5,200 40,000 510 $ 27,000 $198,000 160,000 100 8,200 8,200 20,000