Calculating Activity-Based Costing Overhead Rates
Assume that manufacturing overhead for Goldratt Company consistedof the following activities and costs:
| Setup (1,000 setup hours) | $150,000 |
| Production scheduling (400 batches) | 80,000 |
| Production engineering (60 change orders) | 60,000 |
| Supervision (2,000 direct labor hours) | 66,000 |
| Machine maintenance (12,000 machine hours) | 48,000 |
| Total activity costs | $404,000 |
The following additional data were provided for Job 845:
| Direct materials costs | $7,000 |
| Direct labor cost (5 Milling direct labor hours;35 Finishingdirect labor hours) | $1,000 |
| Setup hours | 5 hours |
| Production scheduling | 1 batch |
| Machine hours used (25 Milling machine hours;5 Finishingmachine hours) | 30 hours |
| Production engineering | 3 change orders |
(a) Calculate the cost per unit of activity driver for eachactivity cost category.
Setup
$Answer
Production scheduling
$Answer
Production engineering
$Answer
Supervision
$Answer
Machine maintenance
$Answer
(b) Calculate the cost of Job 845 using ABC to assign the overheadcosts.
$Answer
(c) Calculate the cost of Job 845 using the plantwide overhead ratebased on machine hours. (Round your answer to the nearestdollar.)
$Answer
(d) Calculate the cost of Job 845 using a machine hour departmentaloverhead rate for the Milling Department ($27 per hour) and adirect hour overhead rate for the Finishing Department ($97 perhour). (Round your answer to the nearest dollar.)
$Answer
