McCallister Company uses an activity-based cost system. The following ABC rates

Question

McCallister Company uses an activity-based cost system.

The following ABC rates have already been calculated.

Job 317 has the following inputs.

20 direct labor hours (the direct labor rate is $25 per hour)

30 pounds of materials (the material cost is $5 per pound)

6 setups

8 machine hours

A. Enter the total amount of overhead applied to this job.

B. Compute the total cost of the job, including overhead.

  Overhead pools Activity rate   Pool A............ $5 per direct labor hour   Pool B............ $1000 per setup Pool C........... $2 per machine hour

Explanation / Answer

A Overhead Pool A 100 =20*5 Pool B 6000 =1000*6 Pool C 16 =8*2 Total 6116 B Direct materials 150 =30*5 Direct labor 500 =20*25 Overhead 6116 Total cost of the job 6766

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