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Problem C-1A Applying activity-based costing LO P1, P2, A1,

[The following information applies to the questions displayed below.] Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.

Production Activity	Indirect Labor				Indirect Materials				Other Overhead
Grinding		$	330,000
Polishing						$	135,000
Product modification			500,000
Providing power										$	255,000
System calibration			590,000

Additional information on the drivers for its production activities follows.

Grinding and Polishing	9,000	machine hours
Product modification	2,200	engineering hours
Providing power	17,000	direct labor hours
System calibration	200	batches

Problem C-1A Part 4

	Job 3175		Job 4286
Number of units	180	units	2,250	units
Machine hours	300	MH	3,000	MH
Engineering hours	29	eng. hours	26	eng. hours
Batches	25	batches	75	batches
Direct labor hours	440	DLH	3,960	DLH

4. If the company used a plantwide overhead rate based on direct labor hours, what would be the overhead cost for each unit of Job 3175? Of Job 4286? (Round OH cost per unit to 2 decimal places.)

5. Compare the overhead costs per unit computed in requirements 3 and 4 for each job. Which method more accurately assigns overhead costs? (Round your answers to 2 decimal places.)

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