A local manufacturer has budgeted these overhead costs:
Purchasing
$88,000
Handling Materials
33,500
Machine Setups
75,200
Inspections
30,000
Utilities
42,500
They are considering adapting ABC costing and have estimated the
cost drivers for each pool as shown:
Cost Driver
Activity
Orders
800
Material Moves
1,340
Machine Setups
16,000
Number of Inspections
6,000
Square Feet
170,000
Recent success has yielded an order for 1,100 tables. Assume
direct labor costs per hour of $15.
Activity
Order, Units
1,100
Direct Materials
112,600
Machine...