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Question - Olive Company makes dessert pies for national convenient food chains. Olive Company is considering using ABC costing and has the following activity cost pools and information available:
Activities
Estimated Overhead Costs
Estimated Activity
Material handling measured by batches
$251,000
2,000 batches
Mixing measured by batches
$110,000
3,520 batches
Packaging measured by units
$84,000
2,100,000 units
Maintenance measured by # of setups
$15,000
260 setups
Olive Company currently uses a plantwide overhead rate based on total estimated machine hours of 100,000 hours.
Based on their estimates for ABC costing, compute the allocated cost for all overhead costs for Job 607 using the following information about the job.
# of units in the job = 4,900
# of units in each batch = 980
# of setups required to complete the job = 1
# of machine hours = 220
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