Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records, costing

Additional information on the drivers for its production activities follows.
Grinding........................................13,000 machine hours
Polishing....................................... 13,000 machine hours
Product modification....................... 1,500 engineering hours
Providing power........................... 17,000 direct labor hours
System calibration.............................. 400 batches
Required
1. Classify each activity as unit level, batch level, product level, or facility level.
2. Compute the activity overhead rates using ABC. Form cost pools as appropriate.
3. Determine overhead costs to assign to the following jobs using ABC.

4. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286?
5. If the company used a plantwide overhead rate based on direct labor hours, what is the overhead cost for each unit of Job 3175? Of Job 4286?
6. Compare the overhead costs per unit computed in requirements 4 and 5 for each job. Which method more accurately assigns overhead costs?

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Production Activity Grinding Polishing.. Product modification Providing power System calibration. . . .····… Indirect Labor $320,000 600,000 500,000 Indirect MaterialsOther Overhead $135,000 .... $255,000 Job 4286 2,500 units 5,500 MH Job 3175 Number of units Machine hours . 200 units 550 MH 26 eng. hours 32 eng, hours 30 batches Batches. . Direct labor hours 90 batches 4,375 DLH 500 DLH