Business, 20.01.2020 21:31 rupanti19p4sqpj

Fortunado company uses abc to account for its chrome wheel manufacturing process. company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. the budgeted activity costs for the upcoming year and their allocation bases are as follows:

activity total budgeted manufacturing overhead cost allocation base
material handling $6400 number of parts
machine setup 9,000 number of setup
insertion of parts 54,400 number of parts
finishing 89,700 finishing direct labour hours
total $159,500

fortunado expects to produce 1,000 chrome wheels during the year. the wheels are expected to use 3,200 parts, require 25 setups, and consume 2,300 hours of finishing time.
job 420 used 250 parts, required 3 setups, and consumed 130 finishing hours.
job 510 used 425 parts, required 6 setups, and consumed 320 finishing hours.

requirements
1. compute the cost allocation rate for each activity.
2. compute the manufacturing overhead cost that should be assigned to job 420.
3. compute the manufacturing overhead cost that should be assigned to job 510.

Answers: 3

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Fortunado company uses abc to account for its chrome wheel manufacturing process. company managers h...

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