A plant using plant-wide overhead and machine-hours for the overhead application rate is considering switching to...

 

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A plant using plant-wide overhead and machine-hours for the overhead application rate is considering switching to an activity-based costing (ABC) overhead costing method. Total overhead was $620,000 for a period that contained two jobs. Job 1 used 8,000 machine-hours; job 2 used 12,000 machine-hours. New data groups overhead costs into three pools for job 1: utilities measured by machine-hours at a predetermined driver rate of $10/machine-hour, materials handling of 60,000 pounds at a rate of $3/pound, and 200 setups at a rate of $300/setup. For job 1, what amount is allocated using the plant-wide and ABC methods? Plant-wide: $310,000; ABC overhead costing: $320,000. Plant-wide: $310,000; ABC overhead costing: $372,000. Plant-wide: $248,000; ABC overhead costing: $320,000. Plant-wide: $248,000; ABC overhead costing: $372,000. A plant using plant-wide overhead and machine-hours for the overhead application rate is considering switching to an activity-based costing (ABC) overhead costing method. Total overhead was $620,000 for a period that contained two jobs. Job 1 used 8,000 machine-hours; job 2 used 12,000 machine-hours. New data groups overhead costs into three pools for job 1: utilities measured by machine-hours at a predetermined driver rate of $10/machine-hour, materials handling of 60,000 pounds at a rate of $3/pound, and 200 setups at a rate of $300/setup. For job 1, what amount is allocated using the plant-wide and ABC methods? Plant-wide: $310,000; ABC overhead costing: $320,000. Plant-wide: $310,000; ABC overhead costing: $372,000. Plant-wide: $248,000; ABC overhead costing: $320,000. Plant-wide: $248,000; ABC overhead costing: $372,000.

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Job 1 Plant wide 620000 x 8000 machine hours 200... View the full answer