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8 ) The following data were taken from the records of Big Sky Ltd. , a manufacturing company . The company has been calculating the actual indirect cost allocation rate using direct labour hours as the allocation base . Actual total indirect costs Budgeted total indirect costs Actual direct labour costs Actual direct labour rate ( per hour ) Actual machine hours # of employees $ 1,152,000 $ 1,216,000 $ 3,200,000 $ 50 30,000 hours 32 What is the actual indirect cost rate at Big Sky Ltd. using direct labour hours as the allocation base ? a ) $ 7.68 b ) $ 18.00 c ) $ 19.00 d ) $ 138.89 e ) $ 384.00

File Home Insert Page Layout Formas Data Review View Help X Calbelight 8 IUR - 11 AN Paste = = 3 Miro Gener $ -% 9 Com we 20 De OO c. Your ordinator Thanks for using modestes to the to Seng The botenaldo bateded to you in the Micro Question 5: Activity Based Casting (10 marks) AI D Question bt Activity Based Conting to mark) Marpole Enterprises currently uses a simple costing system where overhead is allocated on the basis of direct labor hours. There is only one plantwide rate under this simple conting system Management recently heard about activity based costing (ABC) and is determininWhether or not they should implement it in the coming year. As such, management has identified three cout pools to allocate overhead costs asing an ABC wyom. The following estimates are provided for the coming year 3 4 Activity be Cost Pool 5 6 Supervision of direct labour Facility cont 8 Production 9 Total overhead costs Overhead Costs Cost driver SID00 Direct labour hours $100.000 Square metres of area SOKO 20 Machine hours SIIVO 150.00 250 HONO 2 10 pneu Em 11 The accounting records show the Jackson Job consumed the following resources 12 13 Cost driver Actual level 14 Direct labour-hours 15 Square metres of area 200 16 Machine-hours 100 17 8 Cover Sheet Q1 Q2 Q3 Q3 dataset 04 05 06 + 200 Workbook Statistics Calculation Mode: Automatic MacBook Air DAN C Paste BIUD * Wrap Map Center General $ - % Conditional Formats Styles Insert De Form Obat Font 0 Trank for using Office Weve made some updates to the privacy settings to give you more control. Your organiton's minows you to use the died. You get to whether you use Privacy Settings. The options doud-backed services are provided to you under the Microsoft Services Agreement A Question 5: Activity Based Costing (10 marks) A1 The Commy TCUTUS SHOW TURSUN Junsuru onom reduce D G H 12 13 Cost driver 14 15 Actual level 2010 Direct labour.bours Square metres of Arca Machine-hours 200 16 100 17 1. Marpole Enterprises uses a simple cost system where everhead is allocated on the basis of direct labor hours, 18 what is the overhead cost rate? (1 mark) 19 Simple Costing System Rate 20 21 2. Using the simple costing system, what is the amount of indirect costs allocated to the Jackson job? (1 mark) 23 22 Amount allocated to Jackson job 3. Assume the company has decided to implement activity based costing, What is the activity cost rate for each of the three activities? (3 marks) What is the amount of overhead allocated to the Jackson job? (4 marks) 24 Rate Amount allocated to Jackson 25 Cover Sheet Q1 Q2 Q3 Q3 dataset 04 05 06 + Calculation Mode: Automatic Workbook Statistics MacBook Air Excel akaur92 RR Saved File Home Invent Draw Pace LOVE Formulas Data View Help X En Paste Call Light 11 . BIURA 15 weet & Center De 5 - 9 Thank for wing office wewe made some dates to the price to give you more. Your By Settings. The optional bached is provided to you the Agreement A1 Question 5: Activity Based Costing (10 marks) C Kate Amount allocated to Jackson 25 D 26 Supervision of direct labor 27 Facility rent 28 Production 29 Total 30 31 5. When selling prices are based on costs assigned using the single cost driver, machine hours, then the Jackson 32 Job: (1 mark) 33 34 a) is fairly billed because resources are allocated uniformly to all jobs. 35 b) is grossly under billed for the job, while other jobs will be unfairly over billed 36 c) may increase overall sales as other jobs will be cross-subsidized 37 d) is over billed and the customer may complain 38 39 40 END OF QUESTION 4 41 42 Cover Sheet Q1 Q2 Q3 Q3 dataset 04 05 06 + Calculation Mode: Automatic Workbook Statistics ill MacBook Air

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