Homework SourseCalculating ActivityBased Costing Overhead Rates 1 Calculate
Calculating Activity-Based Costing Overhead Rates
1. Calculate the cost per unit of activity driver for each activity cost category.
Setup $_____
Production scheduling $______
Production engineering $______
Supervision $_______
Machine maintenance $______
2. Calculate the cost of Job 845 using ABC to assign the overhead costs.
$______
3. Calculate the cost of Job 845 using the plantwide overhead rate based on machine hours. (Round your answer to the nearest dollar.)
$_____
A food company had the following activities and costs:
The following additional data were provided for Job 845:
| Setup (1,000 setup hours) | $118,000 |
| Production scheduling (400 batches) | 60,000 |
| Production engineering (60 change orders) | 150,000 |
| Supervision (2,000 direct labor hours) | 46,000 |
| Machine maintenance (12,000 machine hours) | 60,000 |
| Total activity costs | $434,000 |
Solution
1. Calculate the cost per unit of activity driver for each activity cost category.
2. Calculate the cost of Job 845 using ABC to assign the overhead costs.
3. Calculate the cost of Job 845 using the plantwide overhead rate based on machine hours. (Round your answer to the nearest dollar.)
Overhead rate = 434000/12000 = 36.167 per machine hour
| Setup (118000/1000) | 118 per setup |
| Production scheduling (60000/400) | 150 per batch |
| Production engineering (150000/60) | 2500 per change order |
| Supervision (46000/2000) | 23 per direct labour hour |
| Machine maintenance (60000/12000) | 5 per machine hour |
