Question: Harris Systems specializes in servers for workgroup, e - commerce, and ERP applications. The company's original job costing system has two direct cost categories: Direct
Harris Systems specializes in servers for workgroup, ecommerce, and ERP applications. The company's original job costing system
has two direct cost categories: Direct materials and direct labor. Overhead is is determined by using direct labor hours.
A task force headed by Harris's CFO recently designed an ABC system with four activities. The ABC system retains the current system's two
direct cost categories. Overhead costs are reflected in the four activities. Pertinent data follow:
The direct labor hours for Harris Systems is hours
Harris Systems has been awarded two new contracts, which will be produced as Job A and Job B Budget data relating to the contracts follow:
a Compute the Predetermined Overhead costs using Job Order costing.
b Compute the budgeted product cost per unit for each job remember to use the direct costs
a Compute the activity rates for each cost pool under activity based costing
b Compute the budgeted product cost per unit for each job.
Which costing system more accurately assigns costs to the jobs based on resources consumend to produce them? Explain your answer.
Please help, very urgent. Thank you!
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