Determining job costs, using activity- based costing Fabreeze Manufacturing Co. uses activity- based costing. The factory overhead
Question:
Determining job costs, using activity- based costing Fabreeze Manufacturing Co. uses activity- based costing.
The factory overhead budget for the coming period is $ 500,000, consisting of the following:
Cost Pool Budgeted Amount Direct labor ........................$150,000
Machine support ................................................................$200,000
Machine setups ..................................................................$100,000
Design changes ....................................................................$50,000
Total ...................................................................................$500,000
The potential allocation bases and their estimated amounts were as follows:
Cost Pool Budgeted Amount
Number of design changes 50 .......................................50
Number of setups 200 .................................................200
Machine hours 10,000 .............................................10000
Direct labor hours 20,000 ........................................20000
1. Determine the overhead rate for each cost pool, using the most appropriate allocation base for each pool. (Use each allocation base only once.)
2. Job 2525 required $ 25,000 for direct materials, $ 10,000 for direct labor, 500 direct labor hours, 1,000 machine hours, five setups, and three design changes. Determine the cost of Job 2525.
Step by Step Answer:
Principles of Cost Accounting
ISBN: 978-1305087408
17th edition
Authors: Edward J. Vanderbeck, Maria Mitchell