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:
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Costs
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Cost Driver
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Expected Activity
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Materials handling
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$210,000
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Material moves
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15,000
|
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Maintenance
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$500,000
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Machine hours
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40,000
|
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Inspection
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$20,000
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Inspections
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8,000
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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:
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Number of material moves
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65
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Number of inspections
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140
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Number of machine hours
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4,500
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Direct materials
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$67,000
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Direct labour
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$57,000
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Number of direct labour hours
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12,700
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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.