Problem A Static Comparing plantwide rate method and activitybased costing LO P P
Craftmore Machining reports the following budgeted overhead cost and related data for this year.
Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage
Assembly $ Direct labor hours DLH
Product design Engineering hours EH
Electricity Machine hours MH
Setup Setups
Total $
Required:
Compute a single plantwide overhead rate assuming the company allocates overhead cost based on direct labor hours.
Job used direct labor hours and Job used direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part
Compute an activity rate for each activity using activitybased costing.
Allocate overhead costs to Job and Job using activitybased costing.
Activity Cost Driver Activity Usage
Job Job
Direct labor hours DLH
Engineering hours EH
Machine hours MH
Setups
