Calculate the cost of Job 845 using ABC to assign the overhead costs.

Calculate the average number of customers per hour must visit your store before you start making profit
December 25, 2020
Cost Management.
December 25, 2020

Assume that manufacturing overhead for Glassman Company in the previous exercise consisted of thefollowing activities and costs:Setup (1,000 setup hours) ………………… $144,000Production scheduling (400 batches)…………. 60,000Production engineering (60 change orders) …….. 120,000Supervision (2,000 direct labor hours) ………… 56,000Machine maintenance (12,000 machine hours) ….. 84,000Total activity costs ……………………. $464,000The following additional data were provided for Job 845:Direct materials costs…………………….. $7,000Direct labor cost (5 Milling direct labor hours;35 Finishing direct labor hours) ……………. $1,000Setup hours …………………………… 5 hoursProduction scheduling ……………………. 1 batchMachine hours used (25 Milling machine hours;5 Finishing machine hours)……………….. 30 hoursProduction engineering …………………… 3 change ordersa. Calculate the cost per unit of activity driver for each activity cost category.b. Calculate the cost of Job 845 using ABC to assign the overhead costs.c. Calculate the cost of Job 845 using the plantwide overhead rate based on machine hours calculatedin the previous exercise.d. Calculate the cost of Job 845 using a machine hour departmental overhead rate for the MillingDepartment and a direct labor hour overhead rate for the Finishing DepartmentMilling Department manufacturing overhead………………………….$344,000Finishing Department manufacturing overhead ………………………..$120,000Machine hours usedMilling Department ………………………………………….10,000 hoursFinishing Department ………………………………………..2,000 hoursLabor hours usedMilling Department ………………………………………….1,000 hoursFinishing Department ………………………………………..1,000 hour

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