Craftmore Machining produces machine tools for the construction

Craftmore Machining produces machine tools for the construction industry. The following details about overhead cost were take from it's company records

Production Activity Indirect Labor Indirect Materials Other Overhead

Grinding $320,000

Polishing $135,000

Product modification 600,000

Providing power $255,000

System calibration 500,000

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

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 cost to assign to the following jobs using ABC

Job 3175 Job 4286

Number of units 200 units 2,500 units

Machine Hours 550mh 5,500 mh

Engineering hours 26 eng hours 32 eng hours

Batches 30 batches 90 batches

Direct labor hours 500 DLH 4,375 DLH

4) What is the overhead cost per unit for Job 3175? What is the overhead cost per unit Job 4286?

5) If the company used a plantwide overhead rate based in direct labor hours, what is the overhead cost for each unit of Job 3175? Of Job 4286?

6) Compare the overhead cost per unit computer in requirements 4 and for each job. Which method more accurately assigns overhead costs?