Problem 17-3A Applying activity-based costing LO P1, P3, A1, A2, C3

[The following information applies to the questions displayed below.] Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.

Production Activity	Indirect Labor				Indirect Materials				Other Overhead
Grinding	$	400,000
Polishing					$	155,000
Product modification		450,000
Providing power									$	245,000
System calibration		540,000

Additional information on the drivers for its production activities follows.

Grinding	14,000	machine hours
Polishing	14,000	machine hours
Product modification	1,500	engineering hours
Providing power	15,000	direct labor hours
System calibration	650	batches

	Job 3175		Job 4286
Number of units	170	units	2,125	units
Machine hours	450	MH	4,500	MH
Engineering hours	27	eng. hours	28	eng. hours
Batches	15	batches	45	batches
Direct labor hours	410	DLH	3,690	DLH

Problem 17-3A Part 1

Required: 1. Classify each activity as unit level, batch level, product level, or facility level.

Grinding
Polishing
Product modification
Providing power
System calibration

Problem 17-3A Parts 2, 3 & 4

2, 3 & 4. Compute the activity overhead rates using ABC. Combine the grinding and polishing activities into a single cost pool. Determine overhead costs to assign to the following jobs using ABC. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286? (Round your activity rate and average overhead cost per unit to 2 decimal places. Round "overhead assigned" to the nearest whole dollar.)

						Job 3175		Job 4286
Activity	Overhead Cost	Activity Drivers		Activity Rate		Activity driver incurred	Overhead assigned	Activity driver incurred	Overhead assigned
Grinding & Polishing			Machine hours
Product modification			Engineering hrs.
Providing power			Direct labor hrs.
System calibration			batches

Problem 17-3A Part 5

5. If the company uses a plantwide overhead rate based on direct labor hours, what is the overhead cost for each unit of Job 3175? Of Job 4286? (Do not round intermediate calculations. Round "OH Cost per unit" answers to 2 decimal places.)

Product	DL hours	Plantwide OH rate	Total Overhead Cost	Units Produced	OH Cost per unit
Job 3175
Job 4286