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Calculating Activity-Based Costing Overhead Rates

Assume that manufacturing overhead for Goldratt Company consisted of the following activities and costs:

Setup (1,000 setup hours)$118,000Production scheduling (400 batches)60,000Production engineering (60 change orders)150,000Supervision (2,000 direct labor hours)46,000Machine maintenance (12,000 machine hours)60,000Total activity costs$434,000

The following additional data were provided for Job 845:

Direct materials costs$7,000Direct labor cost (5 Milling direct labor hours;35 Finishing direct labor hours)$1,000Setup hours5 hoursProduction scheduling1 batchMachine hours used (25 Milling machine hours;5 Finishing machine hours)30 hoursProduction engineering3 change orders

(a) Calculate the cost per unit of activity driver for each activity cost category.

SetupAnswer

Production schedulingAnswer

Production engineeringAnswer

SupervisionAnswer

Machine maintenanceAnswer

(b) Calculate the cost of Job 845 using ABC to assign the overhead costs.

$Answer

(c) Calculate the cost of Job 845 using the plantwide overhead rate based on machine hours. (Round your answer to the nearest dollar.)

$Answer

(d) Calculate the cost of Job 845 using a machine hour departmental overhead rate for the Milling Department ($32 per hour)and a direct hour overhead rate for the Finishing Department ($102 per hour). (Round your answer to the nearest dollar.)

$Answer

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