averyboy2015p9yqkn
22.02.2021 •
Business
Frederick Group uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows:
Activity Total budgeted manufacturing overhead cost Allocation base
Material handeling 8700 Number of parts
Machine setup 4650 Number of setups
Insertion of parts 49300 Number of parts
Finishing 75600 Finishing direct labour hours
Total 138250
Frederick Group expects to produce 1,000 chrome wheels during the year.
The wheels are expected to use 2,900 parts, require 15 setups, and consume 1,800 hours of finishing time. Job 420
Job 420 used 150 parts, required 4 setups, and consumed 120 finishing hours.
Job 510 used 500 parts, required 5 setups, and consumed 320 finishing hours.
Requirements
1.Compute the cost allocation rate for each activity.
2. Compute the manufacturing overhead cost that should be assigned to Job 420.
3. Compute overhead cost that should be assigned to Job510.
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Ответ:
Results are below.
Explanation:
First, we need to calculate the activities allocation rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Material handeling= 8,700/2,900= $3 per part
Machine setup= 4,650/15= $310 per setup
Insertion of parts= 49,300/2,900= $17 per part
Finishing= 75,600/1,800= $42 per direct labor hour
Now, we can allocate overhead to Job 420:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Material handeling= 3*150= $450
Machine setup= 310*4= $1,240
Insertion of parts= 17*150= $2,550
Finishing= 42*120= $5,040
Total allocated costs= $9,280
Finally, allocated costs to Job 510:
Material handeling= 3*500= $1,500
Machine setup= 310*5= $1,550
Insertion of parts= 17*500= $8,500
Finishing= 42*320= $13,440
Total allocated costs= $24,990
Ответ:
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Explanation: