Activity-Based Costing Using Excel (Predictive Analytics)

Kirkland Industries (a contract assembly manufacturer) has decided to adopt activity-based costing techniques to determine its manufacturing overhead rates. The production manager has identified three activities (materials movement, assembly, and packaging/shipping) and a number of possible activity measures (# of jobs, direct labor hours, machine hours, # of boxes shipped, and # of components used). Working together, the production and accounting managers have used historical data from 2014 to 2021 to determine total activity costs by month.

Budgeted overhead dollars and activities for the year are: Check the Analysis ToolPak option and click OK. correlation value for each of the three overhead categories. Note: Round the correlation value to four decimal places. b. Using the measures identified in a, determine the activity rates for allocating manufacturing overhead to jobs. b. Using the measures identified in a, determine the activity rates for allocating manufacturing overhead to jobs. c. What would the predetermined rate be if direct labor hours were used to allocate all manufacturing overhead costs? Note: Round answer to two decimal places. d. Assume Kirkland had a job that required 36 direct labor hours, 16 machine hours, 1,875 components, and 68 boxes. How much manufacturing overhead would be applied to that job under ABC? \$ How does that compare to the amount applied if direct labor hours were used to allocate overhead? Note: Round answer to the nearest dollar