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Search the web e+ e Q Search the web.. xM oh17 Problems)x f3 coO etomheducaton.com/tpx The following informatrion appies to the questions displayed beíow Creft Pro Mochining produces machine tools for the construction industry The followng detols about overhead costs were taken from ns company records Grinding Polishing Product modification Providing power System calbration $ 380,000 600.000 520,000 205,000 5 210,000 Additional information on the drivers for its production activites follows Grinding Polishing Product modification Providing power System celilbration 5,000 mochine hours 15,000 machine hours 1.700 engineering hours 20,000 direct labor hours 250 batches Job 3175 lob 4288 2.750 unns 5000 MH 220 Number of units Machine hours Engineering hours Batches Direct labor hours unts 500 MH 26 eng hours 35 betches 26 eng hours 105 botches 3780 420 DLH DLH

Solution

COMPUTE THE ACTIVITY OVERHEAD RATES USING ABC.....DETERMINE OVERHEAD COSTS TO ASSIGN TO THE FOLLOWING JOBS USING ABC....WHAT IS THE OVERHEAD COST PER UNIT FOR JOB 3175 AND JOB 4286... ACTIVITY OVERHEAD COST ACTIVITY DRIVER ACTIVITY RATE GRINDING & POLISHING ($380000+$205000) 15000 MACHINE HOUR $39.00 PER MACHINE HOUR $585,000.00 PRODUCT MODIFICATION $600,000.00 1700 ENGINEERING HOUR $352.94 PER ENGINEERING HOUR PROVIDING POWER $210,000.00 20000 DIRECT LABOUR HRS $10.50 PER DIRECT LABOUR HOUR SYSTEM CALIBRATION $520,000.00 250 BATCHES $2,080.00 PER BATCH CALCULATE OVERHEAD COST PER UNIT FOR JOB 3175 & JOB 4286 : JOB 3175 JOB 4286 ACTIVITY DRIVER INCURRED OVERHEAD ASSIGNED ACTIVITY DRIVER INCURRED OVERHEAD ASSIGNED 500MH (500X$39) $19,500.00 5000 MH (5000*$39) $195,000.00 26 EH (26X$352.94) $9,176.44 26 EH (26X$352.94) $9,176.44 420 DLH (420X$10.50) $4,410.00 3780 DLH (3780X$10.50) $39,690.00 35 BATCHES (35X$2080) $72,800.00 105 BATCHES (105X$2080) $218,400.00 TOTAL OVERHEAD $105,886.44 $462,266.44 UNIT $220.00 $2,750.00 COST PER UNIT $481.30 $168.10