Required information Problem 17-3A Applying activity-based costing LO P1, P3, A1

Question

Required information Problem 17-3A Applying activity-based costing LO P1, P3, A1, A2, C3 The following information applies to the questions displayed below Craft Pro Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Production Activity Indirect Labor Indirect Materials Other Overhead Grinding Polishing Product modification Providing power System calibration $350,000 450,000 540, 000 $175,000 260,000 Additional information on the drivers for its production activities follows 12,000 machine hour 12,000 machine hour Grinding Polishing Product modi fication,800 engineering hours Providing power Syatem calibration 19,000 direct labor hours 1,550 batches Job 3175 150 units 250 M ob 1286 1,875 units 2, 500 M Mumber of unit Machine hours eng hours eng- 30 30 Engineering hours Batches Direct labor hours hours 45 batches 15 batches 430 DLH 3, 870 DLH

Explanation / Answer

Job 3175 Job 4286 Activity Oerhead Cost Activity Drivers Activity Rate Activity Driver Incurred Overhead Assigned Activity Driver Incurred Overhead Assigned Grinding and Polishing $ 525,000 12,000 machine hours $ 43.75 250 $ 10,938 2,500 $ 109,375 Product Modification 450,000 1,800 engg. hours 250 30 7,500 30 7,500 Providing Power 260,000 19,000 direct labor hours 13.68 430 5,882 3,870 52,942 System Calibration 540,000 1,550 batches 348.39 15 5,226 45 15,678 Totals $ 29,546 $ 185,495 Number of Units 150 1,875 Unit Overhead Cost $ 196.97 $ 98.93

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