Craftmore Machining reports the following budgeted overhead cost and related data for this year. Activity Budgeted Cost Budgeted Activity Usage Assembly Activity Cost Driver $ 458,250 Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) 13,000 1,410 Product design 70,500 23,500 Electricity 10,000 470 58,750 Setups $611,000 Setup Total Required: 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours. 2. Job 31 used 280 direct labor hours and Job 42 used 560 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1. 3. Compute an activity rate for each activity using activity-based costing. 4. Allocate overhead costs to Job 31 and Job 42 using activity-based costing. Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Setups Activity Usage Job 31 280 33 60 3 Job 42 560 39 60 5

Craftmore Machining reports the following budgeted overhead cost and related data for this year. Activity Budgeted Cost Budgeted Activity Usage Assembly Activity Cost Driver $ 458,250 Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) 13,000 1,410 Product design 70,500 23,500 Electricity 10,000 470 58,750 Setups $611,000 Setup Total Required: 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours. 2. Job 31 used 280 direct labor hours and Job 42 used 560 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1. 3. Compute an activity rate for each activity using activity-based costing. 4. Allocate overhead costs to Job 31 and Job 42 using activity-based costing. Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Setups Activity Usage Job 31 280 33 60 3 Job 42 560 39 60 5

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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ABC Company listed the following data for the current year: Budgeted factory overhead $1,134,000 Budgeted direct labor hours 70,000 Budgeted machine hours 25,000 Actual factory overhead 1,100,900 Actual labor hours 71,100 Actual machine hours 24,000 If overhead is applied based on direct labor hours, the overapplied/underapplied overhead is:
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