--/1 Question 4 View Policies Current Attempt in Progress Direct labor or machine hours may not be the appropriate cost driver for overhead in all areas of manufacturing due to the complexities of many manufacturing processes. Many companies use activity-based costing (ABC) which uses multiple drivers (items that consume resources) rather than just one driver to apply overhead to their activities. With ABC, a company can use a cost driver that has a direct cause/effect relationship in its applied overhead costs. Waterways looked into ABC as a method of costing because of the variety of items it produces and the many different activities in which it is involved. The activities listed below area sample of possible cost pools for Waterways. Assembling Payroll Billing Plant supervision Digging trenches Product design Janitorial Purchasing materials Machine maintenance Selling Machine setups Testing Molding Welding Packaging Using the following information, determine the overhead rates and the actual cost assigned for each of the activity cost pools in a possible ABC system for Waterways. (Round answers to 2 decimal places, e.g. 12.25.) WATERWAYS CORPORATION Expected Use of Cost Activity Cost Estimated Drivers per Actual Use of Pools Cost Drivers Overhead Activity Drivers Irrigation installation Labor cost $1,691,690 11,830 11,809 Machining (all machine use) Machine hours 1,620,650 32,413,000 32,414,000 Customer orders Number of orders 32,280 2,690 2,663 Shipping none (direct) N/A N/A traced directly Design Cost per design 792 Selling Number of sales calls 387,600 22,800 23,000 WATERWAYS CORPORATION Activity- Based Overhead Rates Activity Cost Pools Actual Cost Assigned Irrigation installation Machining (all machine use) Customer orders Design Selling How would you classify each of the following activities by level-unit level, batch level, product level, or facility level? Testing of products (if all items are tested) Testing of products (if all items are not tested) Designing new products Packaging Molding Assembling Depreciation Machine maintenance Advertising Equipment setups Electricity required to run equipment Requisitioning materials Batch Facility Unit Product (To record completion of jobs 357 & K52) e Textbook and Media List of Accounts Assuming that Manufacturing Overhead has a debit balance of $3,600, determine whether overhead has been under/over applied and make the adjusting entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit --/1 Question 4 View Policies Current Attempt in Progress Direct labor or machine hours may not be the appropriate cost driver for overhead in all areas of manufacturing due to the complexities of many manufacturing processes. Many companies use activity-based costing (ABC) which uses multiple drivers (items that consume resources) rather than just one driver to apply overhead to their activities. With ABC, a company can use a cost driver that has a direct cause/effect relationship in its applied overhead costs. Waterways looked into ABC as a method of costing because of the variety of items it produces and the many different activities in which it is involved. The activities listed below area sample of possible cost pools for Waterways. Assembling Payroll Billing Plant supervision Digging trenches Product design Janitorial Purchasing materials Machine maintenance Selling Machine setups Testing Molding Welding Packaging Using the following information, determine the overhead rates and the actual cost assigned for each of the activity cost pools in a possible ABC system for Waterways. (Round answers to 2 decimal places, e.g. 12.25.) WATERWAYS CORPORATION Expected Use of Cost Activity Cost Estimated Drivers per Actual Use of Pools Cost Drivers Overhead Activity Drivers Irrigation installation Labor cost $1,691,690 11,830 11,809 Machining (all machine use) Machine hours 1,620,650 32,413,000 32,414,000 Customer orders Number of orders 32,280 2,690 2,663 Shipping none (direct) N/A N/A traced directly Design Cost per design 792 Selling Number of sales calls 387,600 22,800 23,000 WATERWAYS CORPORATION Activity- Based Overhead Rates Activity Cost Pools Actual Cost Assigned Irrigation installation Machining (all machine use) Customer orders Design Selling How would you classify each of the following activities by level-unit level, batch level, product level, or facility level? Testing of products (if all items are tested) Testing of products (if all items are not tested) Designing new products Packaging Molding Assembling Depreciation Machine maintenance Advertising Equipment setups Electricity required to run equipment Requisitioning materials Batch Facility Unit Product (To record completion of jobs 357 & K52) e Textbook and Media List of Accounts Assuming that Manufacturing Overhead has a debit balance of $3,600, determine whether overhead has been under/over applied and make the adjusting entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit