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  3. holbrook, inc., has identified the following overh

Holbrook, Inc., has identified the following overhead costs and cost drivers for next year: ...

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Question

Accounting

Holbrook, Inc., has identified the following overhead costs and cost drivers for next year:

Overhead Item

Expected Cost

Cost Driver

Expected Quantity

Setup costs

$960,000

Number of setups

4,800 setups

Ordering costs

$160,000

Number of orders

20,000 orders

Maintenance

$640,000

Machine hours

64,000 MHs

Power

$80,000

Kilowatt hours

200,000 kw hrs.

The following are two of the jobs completed during the year:

Job 701

Job 702

Prime costs

$25,000

$18,000

Units completed

650

500

Direct labour hours

180

220

Number of setups

12

15

Number of orders

16

30

Machine hours

360

300

Kilowatt hours

180

650

The companys normal activity is 40,000 direct labour hours.

Required

  1. Determine the unit cost of each job using direct labours to apply overhead

  1. Determine the unit cost for each job using Activity-based costing system (round off amounts to two decimal places.)

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