The following information applies to the questions displayed

[The following information applies to the questions displayed below.] Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Production Activity Grinding Polishing Product modification Providing power System calibration Indirect Labor Indirect Materials Other Overhead $ 390,000 450,000 480,000 $ 190,000 $ 200,000 Additional information on the drivers for its production activities follows. Grinding Polishing Product modification Providing power System calibration 11,000 machine hours 11,000 machine hours 1,300 engineering hours 19,000 direct labor hours 700 batches Job 4286 2,250 units 3,000 MH Job 3175 180 Number of units units 300 MH Machine hours Engineering hours Batches 34 eng.hours 10 batches 28 eng.hours 30 batches 4,500 Direct labor hours 500 DLH DLH

Solution

Grinding

Overhead costs

1	Grinding	Unit level
	Polishing	Unit level
	Product modification	Product level
	Providing power	Facility level
	System calibration	Batch level
2.3&4							Job 3175	Job 4286
	Activity	Overhead Cost	Activity Drivers	Activity Rate	Activity driver incurred	Overhead assigned	Activity driver incurred	Overhead assigned
	Grinding & polishing	$580,000	11,000	Machine hours	$             52.73	per machine hour	300	$15,819	3,000	$ 158,190
	Product modification	450,000	1,300	Engineering hrs.	$           346.15	per engineering hour	34	11,769	28	9,692
	Providing power	200,000	19,000	Direct labor hrs.	$             10.53	per direct labor hour	500	5,265	4500	47,385
	System calibration	480,000	700	batches	$           685.71	per batch	10	6,857	30	20,571
							Total overhead cost	$39,710		$ 235,839
							Number of units in job	180		2,250
							Average overhead cost per unit	$220.61		$104.82
5	Overhead costs	$1,710,000	90.00	per direct labor hour
	Direct labor hours	19,000
	Product	DL hours	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
	Job 3175	500	90	45000	180	$250.00
	Job 4286	4,500	90	405000	2250	$180.00