Wings Co. budgeted $572,000 manufacturing direct wages, 2,500 direct labor hours, and had the following manufacturing overhead: Overhead Cost Pool Budgeted Overhead Cost Budgeted Level for Cost Driver Overhead Cost Driver Materials handling $ 196,000 4,900 pounds Weight of materials Machine setup 19,600 560 setups Number of setups Machine repair 1,600 32,000 machine hours Machine hours Inspections 16,500 330 inspections Number of inspections Requirements for Job #971 which manufactured 4 units of product: Direct labor 20 hours Direct materials 220 pounds Machine setup 30 setups Machine hours 16,700 machine hours Inspections 15 inspections The total overhead of Job #971 under the ABC costing is:

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facundobuzzetti facundobuzzetti · Answer 1 · 2020-06-12T02:32:09+02:00

Answer:

Total allocated overhead= $11,435

Explanation:

Giving the following information:

Materials handling $196,000 4,900 pounds

Machine setup $19,600 560 setups

Machine repair $1,600 32,000 machine hours

Inspections $16,500 330 inspections

Job 971

Direct labor 20 hours

Direct materials 220 pounds

Machine setup 30 setups

Machine hours 16,700 machine hours

Inspections 15 inspections

First, we need to calculate the estimated overhead rate for each activity:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Materials handling= 196,000/4,900= $40 per pound

Machine setup= 19,600/560= $35 per setup

Machine repair= 1,600/32,000= $0.05 per machine hour

Inspections= 16,500/330= $50 per inspection

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Materials handling= 40*220= 8,800

Machine setup= 35*30= 1,050

Machine repair= 0.05*16,700=835

Inspections= 50*15= 750

Total allocated overhead= $11,435