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Oliver Industries, a small, family-run manufacturer, has adopted an ABC system. The following manufacturing activities, indirect
Activity | Estimated Total Manufacturing |
Estimated Total Usage of Cost Driver |
Machine setup | $161,650 | 3,050 setups |
Machining | $1,100,000 | 5,000 machine hours |
Quality control | $360,000 | 4,500 tests run |
During May, Jeff and Arabella Oliver machined and assembled Job 557. Jeff worked a total of 10 hours on the job, while Arabella worked 4 hours on the job. Jeff is paid a $25 per hour wage rate, while Arabella is paid $28 per hour because of her additional experience level. Direct materials requisitioned for Job 557 totaled $1,250. The following additional information was collected on Job 557: the job required 2 machine setups, 6 machine hours, and 3 quality control tests.
- 1. Compute the activity cost allocation rates for the year.
- 2. Complete the following job cost record for Job 557:
Job Cost Record Job 557 | Manufacturing Costs |
Direct materials | ? |
Direct labor | ? |
Manufacturing overhead | ? |
Total job cost | $ ? |
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Managerial Accounting (5th Edition)
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