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West Horizon uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials
West Horizon uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: (Click the icon to view the data.) West Horizon expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 2,900 parts, require 15 setups, and consume 1,800 hours of finishing time. (Click the icon for completed job data.) Read the requirements. Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity. 11 Total activity allocation base 2,900 $ . Total activity overhead (est.) 8,700 4,650 49,300 75,600 Mat, handling Mach setup Insertion Finishing 15 Activity cost allocation rate = $ 3 per part = $ 310 per setup 17 per part $ 42 per hour 2.900 11 $ $ $ $ 1,800 Requirement 2. Compute the manufacturing overhead cost that should be assigned to Job 420. MOH Cost 900 i More Info - X 930 Activity Materials handling Machine setup Insertion of parts Finishing Total 5,100 5,460 Job 420 used 300 parts, required 3 setups, and consumed 140 finishing hours. Job 510 used 475 parts, required 6 setups, and consumed 350 finishing hours. 12,390 Requirements - X Done 1. Compute the cost allocation rate for each activity. 2. Compute the manufacturing overhead cost that should be assigned to Job 420. 3. Compute the manufacturing overhead cost that should be assigned to Job 510. Print Done Ent
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