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Chris has a custom curtain and chair cover shop. The job-costing system was designed using an...

Chris has a custom curtain and chair cover shop. The job-costing system was designed using an activity-based approach. There are two direct-cost categories (direct materials and direct labor) and three indirect cost pools. These three cost pools represent three activity areas of work at the shop.

Activity Area Cost Driver Used for Allocation Cost-Allocation Rate
Materials handling Number of pieces in the pattern $2.00 per piece
Stitching Number of pieces in the pattern $25.00 per piece
Assembly/Installation Direct labor hours $15.00 per hour

In October Chris made and installed five sets of curtains and chair covers for clients. A set includes curtains for two windows and coverings for three chairs. The direct labor rate is $20.00 per hour. Cost data for curtains and covers follows:

Direct Direct
Units Material Number Labor
Produced Costs of Pieces Hours
Curtains 10 $2,000 1 20
Chair coverings 15 $3,375 6 90

1).The cost for a set of curtains and chair coverings would be (show the calculations)
a. $5,375. b. $2,385. c. $2,085. d. $1,253.

2).The indirect costs for the shop in October were (show the calculations)
a. $11,925. b. $5,375. c. $4,900. d. $4,350.

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ekkarill92 answered 1 year ago
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