East Horizon uses ABC to account for its chrome wheel manufacturing process. Company managers have identified...
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East Horizon uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: (Click the icon to view the data.) Data table Total Budgeted Manufacturing Activity Overhead Cost Allocation Base Materials handling $ 11,000 Number of parts Machine setup Insertion of parts Finishing 3,600 Number of setups 44,000 Number of parts Finishing direct labor 76,500 hours $ 135,100 Total East Horizon expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 2,750 parts, require 15 setups, and consume 1,700 hours of finishing time. (Click the icon for completed job data.) Read the requirements. Job 420 used 100 parts, required 4 setups, and consumed 130 finishing hours. Job 510 used 450 parts, required 5 setups, and consumed 330 finishing hours. 1.Compute the cost allocation rate for each activity. 2. Compute the manufacturing overhead cost that should be assigned to Job 420. 3.Compute the manufacturing overhead cost that should be assigned to Job 510. Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity. Total activity overhead (est.) Mat. handling 11000 Mach setup 3600 Insertion 44000 76500 Total activity allocation base Activity cost allocation rate per part per setup per part Finishing Requirement 2. Compute the manufacturing overhead cost that should be assigned to Job 420. per hour Activity Materials handling Machine setup MOH Cost Insertion of parts Finishing Total Requirement 3. Compute the manufacturing overhead cost that should be assigned to Job 510. Activity Materials handling Machine setup MOH Cost Insertion of parts Finishing Total East Horizon uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: (Click the icon to view the data.) Data table Total Budgeted Manufacturing Activity Overhead Cost Allocation Base Materials handling $ 11,000 Number of parts Machine setup Insertion of parts Finishing 3,600 Number of setups 44,000 Number of parts Finishing direct labor 76,500 hours $ 135,100 Total East Horizon expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 2,750 parts, require 15 setups, and consume 1,700 hours of finishing time. (Click the icon for completed job data.) Read the requirements. Job 420 used 100 parts, required 4 setups, and consumed 130 finishing hours. Job 510 used 450 parts, required 5 setups, and consumed 330 finishing hours. 1.Compute the cost allocation rate for each activity. 2. Compute the manufacturing overhead cost that should be assigned to Job 420. 3.Compute the manufacturing overhead cost that should be assigned to Job 510. Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity. Total activity overhead (est.) Mat. handling 11000 Mach setup 3600 Insertion 44000 76500 Total activity allocation base Activity cost allocation rate per part per setup per part Finishing Requirement 2. Compute the manufacturing overhead cost that should be assigned to Job 420. per hour Activity Materials handling Machine setup MOH Cost Insertion of parts Finishing Total Requirement 3. Compute the manufacturing overhead cost that should be assigned to Job 510. Activity Materials handling Machine setup MOH Cost Insertion of parts Finishing Total
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