Problem 17-3A Applying activity-based costing LO P1, P3, A1, A2,C3
[The following information applies to the questionsdisplayed below.]
Craft Pro Machining produces machine tools for the constructionindustry. The following details about overhead costs were takenfrom its company records.
| ProductionActivity | Indirect Labor | | Indirect Materials | | Other Overhead |
| Grinding | $ | 380,000 | | | | | | | | | |
| Polishing | | | | | $ | 145,000 | | | | | |
| Productmodification | | 450,000 | | | | | | | | | |
| Providingpower | | | | | | | | | $ | 205,000 | |
| Systemcalibration | | 470,000 | | | | | | | | | |
|
Additional information on the drivers for its production activitiesfollows.
| | |
| Grinding | 19,000 | machinehours |
| Polishing | 19,000 | machinehours |
| Productmodification | 1,600 | engineeringhours |
| Providingpower | 20,000 | direct laborhours |
| Systemcalibration | 800 | batches |
|
| Job 3175 | Job 4286 |
| Number ofunits | 190 | units | 2,375 | units |
| Machinehours | 350 | MH | 3,500 | MH |
| Engineeringhours | 33 | eng. hours | 24 | eng. hours |
| Batches | 5 | batches | 15 | batches |
| Direct laborhours | 510 | DLH | 4,590 | DLH |
|
Problem 17-3A Parts 2, 3 & 4
2, 3 & 4. Compute the activity overheadrates using ABC. Combine the grinding and polishing activities intoa single cost pool. Determine overhead costs to assign to thefollowing jobs using ABC. What is the overhead cost per unit forJob 3175? What is the overhead cost per unit for Job 4286?(Round your activity rate and average overhead cost perunit to 2 decimal places. Round "overhead assigned" to the nearestwhole dollar.)
Overhead Cost----Activity Drivers-----Activity Rate---ActivityDriver incurred----------Overhead assigned------Activity Driverincurred------Overhead Assigned
Grinding andPolishing---------------------------/--------------/MachineHours-------------/--------------------------------/-------------------------------------/------------------------------------/------------------------------------l
ProductModification-----------------------------/---------------/EngineeringHours--------/--------------------------------/-------------------------------------/------------------------------------/-------------------------------------l
ProvidingPower----------------------------------/----------------/DirectLaborHours--------/-------------------------------/--------------------------------------/------------------------------------/-------------------------------------l
SystemCalibration-----------------------------/---------------/batches-------------------------/-------------------------------/--------------------------------------/-------------------------------------/------------------------------------l
