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Calculate total cost assigned under a traditional costing

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Reference no: EM132509539

Spencer Inc. is trying to decide whether to use a traditional costing system or an activity-based costing system.

Data relevant to both costing systems:

Direct materials: $76,000

Direct labour hours: 950

Direct labour rate per hour: $20

Data relevant to a traditional costing system:

The predetermined overhead rate is 210% of direct labour cost.

Activity Cost Pool Cost Driver Overhead Rate Expected Use of Cost Driver

Machining Machine hours $22 per hour 680

Assembly Number of sub-assemblies $7 per sub-assembly 1,220

Packaging and shipping Packaging/shipping hours $12 per hour 210

Question 1: Calculate the total cost assigned under a traditional costing system.

Question 2: Calculate the total cost assigned under an activity-based costing system.

Reference no: EM132509539

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