Hansen Company uses activity-based costing. The factory overhead budget for the coming period is $1,053,000,...
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Accounting
Hansen Company uses activity-based costing. The factory overhead budget for the coming period is $1,053,000, consisting of the following:
Cost Pool
Budgeted Amount
Supervision
$ 320,000
Machine usage
420,000
Machine setups
187,000
Design changes
126,000
Totals
$1,053,000
The potential allocation bases and their estimated amounts were as follows:
Allocation Base
Budgeted Amount
Number of design changes
35
Number of setups
110
Machine hours
6,000
Direct labor hours
10,000
b.
Job 80130 required $45,000 for direct materials, $20,000 for direct labor, 2,000 direct labor hours, 800 machine-hours, five setups, and four design changes. Determine the cost of Job 80130.
c.
Determine the cost of Job 80130 if Hansen used the direct labor hour method of applying overhead.
d.
What is the reason behind the difference in the costs of the job using activities-based costing vs. the direct labor hour method of applying overhead?
for b. answer is 207900
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