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Using activity-based costing (ABC), compute the following:

 
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  • Answered by:John Mark
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Customer Question

Using activity-based costing (ABC), compute the following: •Manufacturing overhead cost per job •Manufacturing overhead per part Using the traditional base of machine hours, compute the following: •Manufacturing overhead cost per job •Manufacturing overhead per part Calculate the selling price for each part using both ABC and the traditional method of allocation of manufacturing overhead.

 

Please see below information for this question.

Major Activities and their Costs

Activities

Total activity costs

Cost behaviour*
Set-ups

$209,000

Variable
Engineering

$151,200

Step fixed, step = 105 hours
Numeric controls programming

$130,400

Variable
Machining

$100,000

Variable
Rework

$101,400

Variable
Inspection

$23,000

Step fixed, step = 230 hours
Sales support#

$80,000

Step fixed, step = 23 orders
TOTAL

$795,000

Variable

 

Job Profiles

Resources used

Small customer job

Large customer job

Set-up hours

3

10

Engineering hours

2

6

Programming hours

1

8

Defective units

20

10

Inspection hours

2

2

Machine hours

2,000

200

Prime costs

$14,000

$1,600

Other data:



Job size

1,000 parts

100 parts

Quarterly jobs (orders)

15

100

Overhead rate

$14.30 per machine hour

$14,30 per machine hour

Sales support per part#

$1.07

$6.40

 

Optional Information:
System of Law: Other

Already Tried:
Not familiar with this accounting question

Submitted: 386 days and 15 hours ago.
Category: Finance
Value: AU$36
Status: CLOSED
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Expert:  John Mark replied 386 days and 15 hours ago.

Hi dear,

I have gone thru to your question, please advise your deadline?

Customer replied 386 days and 15 hours ago.

Tonight! I have completed the theory based part, this part I cannot get around.

 

Thanks so much :-)

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Expert:  John Mark replied 386 days and 15 hours ago.

hopefully will get back with solution

Customer replied 386 days and 15 hours ago.

thankyou so much

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Expert:  John Mark replied 386 days and 15 hours ago.

No problem

Customer replied 386 days and 12 hours ago.

Hi John,
How are you going with the answer?
Thanks :)

Accepted Answer

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Expert:  John Mark replied 386 days and 6 hours ago.

Hi dear,

Please click here for detail working in excel with all the solution, please feel free to inquire if you have any query or else click the green button to accept

Expert TypeAccountant
Category: Finance
Pos. Feedback: 100.0 %
Accepts: 128
Answered: 3/15/2012

Experience: ACCA

Ask this Expert a Question >
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Expert:  John Mark replied 385 days and 14 hours ago.

please feel free to inquire if you have any query or else click the green button to accept

 
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