A. The Green Company makes boats from wood. Job 489 is to build 40 rowboats.
Job 489 requires 1,000 pounds of wood costing $8 per pound. It requires 60 hours of direct labor costing $25 per hour.
Total manufacturing overhead cost expected for all jobs during the whole year in the Machining department $160,000
Estimated machine hours for all jobs during the whole year in the Machining department 8,000
Estimated direct labor hours for all jobs during the whole year in the Machining department 10,000
Total manufacturing overhead cost expected for all jobs during the whole year in the Assembly department $240,000
Estimated machine hours for all jobs during the whole year in the Assembly department 16,000
Estimated direct labor hours for all jobs during the whole year in the Assembly department 30,000
Calculate the following if the Green Company uses a different predetermined overhead rate for each department. In the Machining department the predetermined overhead rate uses machine hours as the allocation base, while in the Assembly department the predetermined overhead rate uses direct labor hours as the allocation base:
1. The predetermined overhead rate for the Machining department
2. The predetermined overhead rate for the Assembly department
3. The direct materials cost of job 489
4. The direct labor cost of job 489
5. The manufacturing overhead cost applied to job 489 if the job uses 9 machine hours in the Machining department and 50 direct labor hours in the Assembly department
6. The total cost of job 489
7. The cost per boat
B. The Green Company makes boats from wood. Job 489 is to build 40 rowboats.
Job 489 requires 1,000 pounds of wood costing $8 per pound. It requires 60 hours of direct labor costing $25 per hour.
Total cost for all jobs Total amount of activity for all jobs
Type of manufacturing overhead for the whole year for the whole year
Setup Cost $50,000 400 setups
Materials Handling 320,000 16,000 moves
Electricity 30,000 6,000 machine hours
_______
Total manufacturing overhead cost
for all jobs during the whole year $400,000
Please calculate the following if the Green Company uses activity based costing (the ABC method)::
1. The allocation rate for setup cost
2. The allocation rate for materials handling
3. The allocation rate for electricity
4. The direct materials cost of job 489
5. The direct labor cost of job 489
6. The manufacturing overhead cost applied to job 489 if job 489 requires 4 setups, 150 moves of materials, and 40 machine hours
7. The total cost of job 489
8. The cost per boat