Reference no: EM13518324

Hastings Hardwood Floors installs oak and other hardwood floors in homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity based costing system:

Overhead costs:
Production overhead	$110,000
Office expense	130,000
Total	$240,000

Distribution of resource consumption:

Activity Cost Pools	Installing Floor	Job Supports	Other	Total
Production overhead	50%	30%	20%	100%
Office expense	5%	65%	30%	100%

The "Other" activity cost pool consists of the costs of idle capacity and organization sustaining costs.

The amount of activity for the year is as follows:

Activity Cost Pool	Annual Activity
Installing floors	400 squares
Job support	100 jobs
Other	Not applicable

A ""square"" is a measure of area that is roughly equivalent to1,000 square feet.

Required:

a. Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below:

	Installing	Job
	Floors	Support	Other	Total
Production overhead
Office expense
Total

b. Compute the activity rates (i.e., cost per unit of activity)for the Installing Floors and Job Support activity cost pools by filling in the table below:

	Installing	Job
	Floors	Support
Production overhead
Office expense
Total

c. Compute the overhead cost, according to the activity-based costing system, of a job that involves installing 1.8 squares.