Question

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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	$	340,000
Polishing					$	170,000
Product modification		450,000
Providing power									$	205,000
System calibration		580,000

Additional information on the drivers for its production activities follows.

Grinding	13,000	machine hours
Polishing	13,000	machine hours
Product modification	1,900	engineering hours
Providing power	20,000	direct labor hours
System calibration	500	batches

	Job 3175		Job 4286
Number of units	130	units	1,625	units
Machine hours	400	MH	4,000	MH
Engineering hours	29	eng. hours	20	eng. hours
Batches	15	batches	45	batches
Direct labor hours	420	DLH	3,780	DLH

2, 3 & 4. Compute the activity overhead rates using ABC. Combine the grinding and polishing activities into a single cost pool. Determine overhead costs to assign to the following jobs using ABC. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286? (Round your activity rate and average overhead cost per unit to 2 decimal places. Round "overhead assigned" to the nearest whole dollar.)

	Job 3175 Job 4286 Activity Overhead Cost Activity Drivers Activity Rate Activity driver incurred Overhead assigned Activity driver incurred Overhead assigned Grinding & Polishing Machine hours Product modification Engineering hrs. Providing power Direct labor hrs. System calibration batches

Answer 1