Question

Assume that manufacturing overhead for Glassman Company consisted of the following activities and costs:

Setup (1,000 setup hours)	$ 146,000
Production scheduling (400 batches)	60,000
Production engineering (60 change orders)	90,000
Supervision (2,000 direct labor hours)	56,000
Machine maintenance (12,000 machine hours)	96,000
Total activity costs	$ 448,000

The following additional data were provided for Job 845:

Direct material costs	$ 8,000
Direct labor cost (5 Milling direct labor hours; 35 Finishing direct labor hours)	$ 1,000
Setup hours	5 hours
Production scheduling	1 batch
Machine hours used (25 Milling machine hours;5 Finishing machine hours)	30 hours
Production engineering	3 change orders

(a) Calculate the cost per unit of activity driver for each activity cost category.

Setup	Answer
Production scheduling	Answer
Production engineering	Answer
Supervision	Answer
Machine operating	Answer

(b) Calculate the cost of Job 845 using ABC to assign the overhead costs.
$Answer

(c) Calculate the cost of Job 845 using the plantwide overhead rate based on machine hours. (Round your answer to the nearest dollar.)
$Answer

(d) Calculate the cost of Job 845 using a machine hour departmental overhead rate for the Milling Department ($28 per hour) and a direct hour overhead rate for the Finishing Department ($100 per hour). (Round your answer to the nearest dollar.)
$Answer

Answer 1

Answer to Question a:

Answer to Question b:

Activity Cost = Activity Rate X Activity Consumed

Answer to Question c and d: