Question
You MUST show all work in order to receive credit for the problems. MUST BE IN EXCEL Problem 3 Midtown Inc. uses an activity based
You MUST show all work in order to receive credit for the problems. MUST BE IN EXCEL
Problem 3
Midtown Inc. uses an activity based costing system contains the following six activity cost pools:
| Activity Cost Pool | Estimated Overhead Costs | Estimated Activity | |
| Indirect Labor | $ 1,100,000 | 100,000 | Direct Labor Hours |
| Machine processing | 120,000 | 40,000 | Machine Hours |
| Machine setups | 675,000 | 15,000 | Setups |
| Production orders | 1,350,000 | 9,000 | Orders |
| Shipments | 1,470,000 | 12,250 | Shipments |
| Product Testing | 405,000 | 450 | Products |
| Total: | $ 5,120,000 |
Activity data have been supplied for the following two jobs:
| JOB 485 | JOB 486 | |
| Number of units produced | 400 | 950 |
| Direct Labor Hours | 850 | 700 |
| Machine Hours | 1,475 | 1300 |
| Setups | 5 | 2 |
| Orders | 8 | 3 |
| Shipments | 14 | 1 |
| Products | 2 | 2 |
Required:
- Calculate the activity rates for each of the pools.
- Determine the amount of overhead to be allocated to each job.
- Calculate the amount of overhead per unit produced.
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Survey of Accounting
Authors: Thomas P. Edmonds, Frances M. McNair, Philip R. Olds, Bor Yi
3rd Edition
978-1259683794, 77490835, 1259683796, 9780077490836, 978-0078110856
