### Upside Down, Incorporated Custom Storage Design: Project Data Overview**Upside Down, Incorporated** designs custom storage spaces to eliminate clutter in both residential and business settings. The following data pertain to a recent reporting period:#### Design Department:- **Client Consultation** - 500 contact hours - $100,000- **Drawing** - 1,000 design hours - $75,000- **Models** - 20,000 square feet - $25,000#### Project Management:- **Supervision** - 250 days - $43,750- **Billings** - 150 jobs - $52,500---### Required Calculation1. **Activity-Based Costing (ABC) Overhead Rates Calculation:** Use ABC to compute overhead rates for each activity.2. **Cost Assignment:** Assign costs to a 3,000 square foot job that requires 70 contact hours, 20 design hours, and 14 days to complete.---### Activity-Based Costing (ABC) Calculation Example1. **Client Consultation:** - Total Cost: $100,000 - Total Contact Hours: 500 - Overhead Rate = Total Cost / Total Contact Hours = $100,000 / 500 = $200/contact hour2. **Drawing:** - Total Cost: $75,000 - Total Design Hours: 1,000 - Overhead Rate = Total Cost / Total Design Hours = $75,000 / 1,000 = $75/design hour3. **Models:** - Total Cost: $25,000 - Total Square Feet: 20,000 - Overhead Rate = Total Cost / Total Square Feet = $25,000 / 20,000 = $1.25/square foot4. **Supervision:** - Total Cost: $43,750 - Total Days: 250 - Overhead Rate = Total Cost / Total Days = $43,750 / 250 = $175/day5. **Billings:** - Total Cost: $52,500 - Total Jobs: 150 - Overhead Rate = Total Cost / Total Jobs = $52,500 / 150 = $350/job### Assigning Costs to the

ABC analysis or Activity-based costing is defined as one of the modern methods of distributing the…

Upside Down, Incorporated designs custom storage spaces to eliminate clutter in both residential and business settings. The following data pertain to a recent reporting period: Design department Client consultation 500 contact hours 1,000 design hours Drawing $100,000 $75,000 $ 25,000 Models 20,000 square feet Project Management 250 days Supervision Billings $ 43,750 $ 52,500 150 jobs Required . Use ABC to compute overhead rates for each activity. Assign costs to a 3,000 square foot job that requires 70 contact hours, 20 design hours, and 14 day mplete.

Upside Down, Incorporated designs custom storage spaces to eliminate clutter in both residential and business settings. The following data pertain to a recent reporting period: Design department Client consultation 500 contact hours 1,000 design hours Drawing $100,000 $75,000 $ 25,000 Models 20,000 square feet Project Management 250 days Supervision Billings $ 43,750 $ 52,500 150 jobs Required . Use ABC to compute overhead rates for each activity. Assign costs to a 3,000 square foot job that requires 70 contact hours, 20 design hours, and 14 day mplete.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter11: Strategic Cost Management

Section: Chapter Questions

Problem 4CE: Kagle design engineers are in the process of developing a new green product, one that will...

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