6 3 points Because the company has become much more automate

6) (3 points) Because the company has become much more automated in recent periods, Superior is considering adopting an Activity Based Costing System to replace its traditional costing system Superior Company would like to compare operating results under the two methods, traditional and ABC. Supenior Company has identified the following cost activities; Support, Batch setups, Product sustaining. Inspection and General Factory. Eighteen percent of the overhead costs can be attributable to Support, 10% to Batch Setups,22% to Product sustaining, 8% for inspection and be est to General Factory. Superior Company has identified the drivers for each of these costs pools and accumulated statistics for each as they have related to the recent period. Use the table below to complete each requirement a Use the percentage provided in the description (underlined) to allocate the total applied overbead from JE in 1d) to each cost pool b) Use the driver units to calculate an activity rate for each pool by dividing \"Allocated costs by \"units\". Show 2 decimals for calculated rates Allocated Calculated Driver units Driver 3,000 Receipts Rate Support Batch Setups Product Sustaining Inspection General Factory Total OH JE 1d) 155 #ofset ups 70 # of materials 1,200 units 14,000 machine hours (4 points) In an Activity Based Costing System, overhead is allocated to each job from each cost pool Driver units\'statistics are accumulated for each job and they are listed in the table below. Complete the table below for the following requirements. a) Use the activity units for each job included in the table and the rates calculated in 6b) above to calculate the overhead allocated for each activity For each job, determine the total overhead applied by adding the costs allocated from each pool Support, Batch Setups, Product Sustaining and General Factory). b) JV28 BY92 ZF14 unuts sunitsCostsunitsCosts 1,500 40 20 220 8.000 Batch Setups Product Sustaining 23 60 880 80 4.200 General Factory Total Overhead Applied

Solution

A Manufacturing overhead appllied to work in process inventory $332,000 B C=B*A D E=C/D % allocation Allocated costs Driver Units Calculated Rate Driver a Support 18% $                    59,760 3000 $                  19.92 Receipts b Batch set up 10% $                    33,200 155 $                214.19 # of setups c Product Sustaining 22% $                    73,040 70 $            1,043.43 # of materials d Inspection 8% $                    26,560 1200 $                  22.13 units e=100-a-b-c-d General factory 42% $                  139,440 14000 $                     9.96 machine hours Total Overhead applied 100% $                  332,000 JV28 BY92 ZF14 Units Costs=Units*(Calculated rate) Units Costs=Units*(Calculated rate) Units Costs=Units*(Calculated rate) Support 1500 $                    29,880 200 $                  3,984 420 $                8,366 Batch set up 40 $                      8,568 23 $                  4,926 11 $                2,356 Product Sustaining 20 $                    20,869 14 $                14,608 8 $                8,347 Inspection 220 $                      4,869 60 $                  1,328 80 $                1,771 General factory 8000 $                    79,680 880 $                  8,765 4200 $              41,832 Total Overhead applied $                  143,866 $                33,611 $              62,673