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Calculate the total overhead cost

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Reference no: EM132557605

Question - Judy Bloom Manufacturing Inc. ("the company") is a chair manufacturer, and has three different categories of overhead. The overhead costs for each of the categories for the next year are as follows:

 

Costs

Cost Driver

Expected Activity

Materials handling

$210,000

Material moves

15,000

Maintenance

$500,000

Machine hours

40,000

Inspection

$20,000

Inspections

8,000

The company applies overhead using a predetermined overhead rate based upon a budgeted direct labour hours of 73,000.

The company has been asked to submit a bid on a proposed job. In order to submit this bid, the company needs to calculate the total cost of performing this job. Financial details for the proposed job are as follows:

Number of material moves

65

Number of inspections

140

Number of machine hours

4,500

Direct materials

$67,000

Direct labour

$57,000

Number of direct labour hours

12,700

Use the information provided to answer the following questions.

Question 1 - If the company used activity-based costing, calculate the total overhead cost that would be assigned for material handling to the job.

Question 2 - If the company used activity-based costing, calculate the total overhead cost that would be assigned for maintenance to the job.

Question 3 - If the company used activity-based costing, calculate the total overhead cost that would be assigned for inspections to the job.

Question 4 - If the company used activity-based costing, calculate the total of material cost + direct labour cost that would be assigned to the job.

Question 5 - If the company used activity-based costing, calculate the total cost that would be assigned to the job.

Question 6 - If the company allocated overhead to the job using a plantwide overhead rate, calculate the total overhead cost assigned to the job.

Question 7 - If the company allocated overhead to the job using a plantwide overhead rate, calculate the total cost assigned to the job.

Question 8 - It would not be appropriate to adopt an ABC policy if which of the following were true:

a) All of the other answers are correct.

b) All products consumed resources in a similar manner.

c) The products being produced were quite similar.

d) The cost of developing individual cost pools was too great.

Reference no: EM132557605

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