Problem
Zippy Company uses ABC to accounting for costs in it's manufacturing process. They have identified three manufacturing activities that incur manufacturing overhead costs: Materials handling, machine setups and general factory facility support. They have determined the costs of these activities and the allocation bases to be as shown below. Calculate the total overhead allocated to JOB 510, which has 418 parts, 20 setups, and 45 direct labor hours. (note: when calculating your overhead rates, round them to four decimal places before calculating the cost of the job, for example, 23.3125).Round all calculations including your final answer to four decimal places.
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Activity
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Overhead Cost
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Allocation Base
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Materials Handling
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$6390
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Number of parts, 3200 total parts anticipated
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Machine Setup
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$10818
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Number of setups, 25 total setups anticipated
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General Facilities
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$97358
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Direct Labor Hours, 1000 total hours anticipated
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