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Part 1. New Firm uses an ABC system. The system includes 4 cost pools: mixing,...

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Accounting

Part 1. New Firm uses an ABC system. The system includes 4 cost pools: mixing, machining finishing and packing. Mixing is allocated on the basis of DM cost; machining is allocated on the basis of machine hours; finishing is allocated on the basis of DL hours and packing is allocated on the basis of product weight. At the beginning of this year, the following estimates were made

Direct Materials $734,000

Direct Labor 953,000

Mixing cost 377,000

Machining cost 721,000

Finishing cost 467,000

Packing cost 167,000

Units produced 800

Average weight per unit 89 ounces

DL hours 32,000

Machine hours 306,000

Job 491 was produced on June 16. It contained $3,890 in DM and $8,400 in DL. It weighed 52 ounces. Production required 416 DLH and 981 machine hours.

  1. Assuming the firm uses a traditional job costing system applied on the basis of DLH, what is the cost of Job 491?

  1. Assuming the firm uses an ABC system, what is the cost of Job 491?

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