ActivityDriverDriver FrequencyCost of ActivityDirect LaborDirect Labor Hours 50,000$ 1,250,000.00...ActivityDriverDriver FrequencyCost of ActivityDirect LaborDirect Labor Hours 50,000$...

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Accounting

Activity Driver Driver Frequency Cost of Activity
Direct Labor Direct Labor Hours                  50,000 $ 1,250,000.00
Vacuuming Machine Hours                     2,000 $       62,000.00
Set-up Job                     5,000 $     200,000.00
Testing Tests made                     5,000 $       60,000.00
Customer service Orders taken                     1,200 $       30,000.00
Invoicing Invoices mailed                     2,400 $       48,000.00
Total $ 1,650,000.00
Activity Pool Opening Pump Repair Pool Cleaning
Materials 350 1000 50
Direct Labor Hours 15 40 2
Vacuuming 3 0 2
Set-up 1 1 1
Testing 3 0 2
Orders taken 1 1 1
Invoices 2 2 1
Add 35% profit onto every job.
a.       Calculate the currentoverhead rate per direct labor hour
b.       Calculate the cost of eachof the jobs using direct labor hour as the rate
c.       Calculate the price chargedfor the job
d.       Calculate the ABC chargingrates.
e.       Recalculate the costs foreach job using these new rates.
f.        Once again calculatethe price Tom would charge for each of these jobs.
g.       What does a comparison ofthe results suggest? Be specific.

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4.3 Ratings (517 Votes)

Answer Requirement a Calculate the current overhead rate per direct labor hour Current overhead rate per direct labor hour Total overhead costTotal direct labor hours 165000050000 3300 Requirement b The cost of each of the jobs using See Answer

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In: AccountingActivityDriverDriver FrequencyCost of ActivityDirect LaborDirect Labor Hours 50,000$ 1,250,000.00...ActivityDriverDriver FrequencyCost of ActivityDirect LaborDirect Labor Hours 50,000$ 1,250,000.00VacuumingMachine Hours 2,000$ 62,000.00Set-upJob 5,000$ 200,000.00TestingTests made 5,000$ 60,000.00Customer serviceOrders taken 1,200$ 30,000.00InvoicingInvoices mailed 2,400$ 48,000.00Total$ 1,650,000.00ActivityPool OpeningPump RepairPool CleaningMaterials350100050Direct Labor Hours15402Vacuuming302Set-up111Testing302Orders taken111Invoices221Add 35% profit onto every job.a. Calculate the currentoverhead rate per direct labor hourb. Calculate the cost of eachof the jobs using direct labor hour as the ratec. Calculate the price chargedfor the jobd. Calculate the ABC chargingrates.e. Recalculate the costs foreach job using these new rates.f. Once again calculatethe price Tom would charge for each of these jobs.g. What does a comparison ofthe results suggest? Be specific.

Activity	Driver	Driver Frequency	Cost of Activity
Direct Labor	Direct Labor Hours	50,000	$ 1,250,000.00
Vacuuming	Machine Hours	2,000	$ 62,000.00
Set-up	Job	5,000	$ 200,000.00
Testing	Tests made	5,000	$ 60,000.00
Customer service	Orders taken	1,200	$ 30,000.00
Invoicing	Invoices mailed	2,400	$ 48,000.00
Total			$ 1,650,000.00


Activity	Pool Opening	Pump Repair	Pool Cleaning
Materials	350	1000	50
Direct Labor Hours	15	40	2
Vacuuming	3	0	2
Set-up	1	1	1
Testing	3	0	2
Orders taken	1	1	1
Invoices	2	2	1
Add 35% profit onto every job.
a. Calculate the currentoverhead rate per direct labor hour

b. Calculate the cost of eachof the jobs using direct labor hour as the rate

c. Calculate the price chargedfor the job

d. Calculate the ABC chargingrates.

e. Recalculate the costs foreach job using these new rates.

f. Once again calculatethe price Tom would charge for each of these jobs.

g. What does a comparison ofthe results suggest? Be specific.