Scottso Enterprises has identified the following overhead costs and cost drivers
ID: 2353088 • Letter: S
Question
Scottso Enterprises has identified the following overhead costs and cost drivers for the coming year:
Overhead Item Cost Driver Budgeted Cost Budgeted Activity Level
Quality Number of inspections $250,000 12,500
Material handling Number of material moves $170,000 10,000
Engineering Engineering hours $100,000 2,500
Machine setup Setup hours $40,000 400
Budgeted direct labor cost was $200,000, and budgeted direct material cost was $800,000. The following information was collected on three jobs that were completed during the month:
JOBA-15JOB A-28 JOB B-32
Direct materials $15,000 $28,000 $18,000
Direct labor $4,000 $4,000 $8,000
Units completed $200 $100 $300
Number of inspections 20 100 300
Number of material moves 60 20 80
Engineering hours 10 50 10
Number of setups 3 5 8
If the company uses activity-based costing (ABC), how much overhead cost should be assigned to Job A-15?Explanation / Answer
$11,200
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