V1.pdf ACCOUNTING/LECTURES/ACC337 Quiz2_ANSWERS alCSUDH Authenticat... Cost Acti

Question

V1.pdf ACCOUNTING/LECTURES/ACC337 Quiz2_ANSWERS alCSUDH Authenticat... Cost Activity Driver Quantity Overhead ltem Setup costs $100,000 40,000 200,000 20,000 Number of setups Number of orders Machine hours 500 3,200 4,000 Ordering costs Power Kilowatt hours 80,000 The following are two of the jobs completed during the year: Direct materials Direct labor Units completed Direct labor hours Number of setups $375 $1,000 $350 $1,200 160 100 50 Number of orders Machine hours 20 25 Kilowatt hours 30 50 The company's normal activity is 4,000 direct labor hours. fthe a tivity drivers are used to allocate overhead costs, te unt oost (rounded to two decimal places) for Job DO would be

Explanation / Answer

Calculation of overhead allocation rate

Ordering costs

Calculation of unit cost for job DD

Expected overhead items Cost Activity driver quantity Allocated rate Setup costs 100,000 500 $200 per setup

Ordering costs

40,000 3200 $12.50 per order Maintenance 200,000 4000 $50 per machine hour Power 20,000 80,000 $0.25 per kilowatt hour

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