Question

total activity cost pool ÷ total activity allocation base = activity cost allocation rate
machine setup $ 137,500 ÷ 2,500 = $ 55.00 per setup
machining $ 560,000 ÷ 4,000 = $ 140.00 per mh
polishing $ 165,000 ÷ 15,000 = $ 11.00 per cloth
quality control $ 225,000 ÷ 2,500 = $ 90.00 per test
facility level costs $ 270,000 ÷ 90,000 = $ 3.00 per dl hour
requirement 2. calculate the total cost of job #624 (use an abc costing system).
job cost record
job # 624
manufacturing costs
direct materials $ 1,160
direct labor $ 435
manufacturing overhead allocated
total job cost
other data
4 machine setups required
3 machine hours
3 polishing cloths
3 quality control tests run

Explanation:

Step1: Calculate setup overhead cost

$\text{Setup cost} = 4 \times 55.00 = 220.00$

Step2: Calculate machining overhead cost

$\text{Machining cost} = 3 \times 140.00 = 420.00$

Step3: Calculate polishing overhead cost

$\text{Polishing cost} = 3 \times 11.00 = 33.00$

Step4: Calculate quality control cost

$\text{Quality control cost} = 3 \times 90.00 = 270.00$

Step5: Calculate facility level overhead cost

First, find direct labor hours: $\text{Direct labor hours} = \frac{435}{3.00} = 145$
$\text{Facility cost} = 145 \times 3.00 = 435.00$

Step6: Sum all manufacturing overhead

$\text{Total overhead} = 220 + 420 + 33 + 270 + 435 = 1378.00$

Step7: Calculate total job cost

$\text{Total cost} = 1160 + 435 + 1378 = 2973.00$

Answer:

Manufacturing overhead allocated: $\$1378.00$
Total job cost: $\$2973.00$