Compute the activity rates for the painting

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Reference no: EM13518316

Jardon Painting paints the interiors and exteriors of homes and commercial buildings.

The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its activity-based costing system.

Activity Cost Pool

Activity Measure

Annual Activity

Painting overhead

Square meters

10,000 square meters

Job support

Jobs

200 jobs

Other

None

Not applicable

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

The company has already finished the first stage of the allocation process in which costs were allocated to the activity cost centers. The results are listed below:


Painting

Job Support

Other

Total

Painting overhead

$ 99,000

$ 77,000

$44,000

$220,000

Office expense

14,000

84,000

42,000

140,000

Total

$113,000

$161,000

$86,000

$360,000

Required:

a. Compute the activity rates for the Painting and Job Support activity cost pools by filling in the table below. Round off all calculations to the nearest whole cent.



Job


Painting

Support

Painting overhead



Office expense



Total



b. Prepare an action analysis report in good form of a job that involves painting 69 square meters and has direct materials and direct labor cost of $2,190. The sales revenue from this job is $3,400. For purposes of this action analysis report, direct materials and direct labor should be classified as a Green cost; painting overhead as a Red cost; and office expense as a Yellow cost.

Reference no: EM13518316

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