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		$	320,000
Polishing						$	180,000
Product modification			450,000
Providing power										$	205,000
System calibration			580,000

Additional information on the drivers for its production activities follows.

Grinding

15,000

machine hours

Polishing

15,000

machine hours

Product modification

2,200

engineering hours

Providing power

21,000

direct labor hours

System calibration

1,550

batches

Compute the activity overhead rates using ABC. Form cost pools as appropriate. 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

Number of units

140

units

1,750

units

Machine hours

250

MH

2,500

MH

Engineering hours

28

eng.hours

22

eng.hours

Batches

20

batches

60

batches

Direct labor hours

510

DLH

4,590

DLH

						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