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Problem 17-1A (Static) Comparing plantwide rate method and activity-based costing LO P1, P3 Craftmore...

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Accounting

Problem 17-1A (Static) Comparing plantwide rate method and activity-based costing LO P1, P3
Craftmore Machining reports the following budgeted overhead cost and related data for this year.
Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage
Assembly $ 390,000 Direct labor hours (DLH)13,000
Product design 60,000 Engineering hours (EH)1,000
Electricity 20,000 Machine hours (MH)10,000
Setup 50,000 Setups 400
Total $ 520,000
Required:
Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours.
Job 31 used 200 direct labor hours and Job 42 used 480 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1.
Compute an activity rate for each activity using activity-based costing.
Allocate overhead costs to Job 31 and Job 42 using activity-based costing.
Activity Cost Driver Activity Usage
Job 31 Job 42
Direct labor hours (DLH)200480
Engineering hours (EH)2632
Machine hours (MH)5060
Setups 46

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