Assign the overhead costs

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Reference no: EM13919224

Calculating Activity-Based Costing Overhead Rates

Assume that manufacturing overhead for Goldratt Company consisted of the following activities and costs:

Setup (1,000 setup hours)	$150,000
Production scheduling (400 batches)	80,000
Production engineering (60 change orders)	60,000
Supervision (2,000 direct labor hours)	66,000
Machine maintenance (12,000 machine hours)	48,000
Total activity costs	$404,000

The following additional data were provided for Job 845:

Direct materials costs	$7,000
Direct labor cost (5 Milling direct labor hours; 35 Finishing direct labor hours)	$1,000
Setup hours	5 hours
Production scheduling	1 batch
Machine hours used (25 Milling machine hours; 5 Finishing machine hours)	30 hours
Production engineering	3 change orders

(a) Calculate the cost per unit of activity driver for each activity cost category.
Setup

Production scheduling

Production engineering

Supervision

Machine maintenance

(b) Calculate the cost of Job 845 using ABC to assign the overhead costs.

(c) Calculate the cost of Job 845 using the plant wide overhead rate based on machine-hours. (Round your answer to the nearest dollar.)

Reference no: EM13919224

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