Franklin Fabricators completed two jobs in June. Franklin recorded the following costs assigned to the jobs by the company's activity-based costing system:

Job 622 required 2,500 parts, 62,500 lathe turns, and 1,000 machine hours. All 375 of the job's output units were tested. All units of Job 409 were tested.
Requirements
1. How do you know that at least one of the costs recorded for the two jobs is inaccurate?
2. Disregard materials handling costs. How many parts were used for Job 409? How many lathe turns did Job 409 require? How many machine hours? How many units were produced in Job 409?
3. A nearby company has offered to test all product units for $15 each. On the basis of ABC data, should Franklin Fabricators accept or reject the offer? Give your reason.

Transcribed Image Text:

Allocated Cost Job 409 Job 622 S 400 1,200 $5,200 $15,000 Allocation Base Number of parts S 360 $1,800 $ 120 3,000 Number of output units