Concept explainers
Hansen Company uses activity-based costing. The factory
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 |
a. |
Determine the overhead rate for each cost pool, using the most appropriate allocation base for each pool. |
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? |
need help for C and D. for B answer is 207900
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