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ABCproblem438

# ABCproblem438 - \$1,000,000 50,000 inspections \$20.00 Mach...

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Problem 38 Activity Based Costing a) The problem gives sources of overhead and total overhead of \$5,850,000 \$5,850,000 / 1,000,000MH = \$5.85/MH b) Cost of 2,500 doors under traditional costing Direct materials \$50,000 Direct labor \$150,000 Applied overhead (5000 * \$5.85) \$29,250 Total Costs \$229,250 Divided by # of doors 2,500 Total cost per door \$91.70 Computation of overhead drivers Activty Total Cost Total Units Measure Cost/Activity Unit Power \$500,000 200,000 kwh \$2.50 Work Cells \$3,000,000 300,000 Sq ft \$10.00 Matl handling \$1,000,000 200,000 mat moves \$5.00 Qlty ctrl ins
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Unformatted text preview: \$1,000,000 50,000 inspections \$20.00 Mach setups \$350,000 25,000 setups \$14.00 \$5,850,000 c) Cost of 2,500 doors under Activity Based Costing Direct materials \$50,000 Direct labor \$150,000 Other costs Units of Act Cost/Unit Total Power 500 \$2.50 \$1,250 Work Cells 1000 \$10.00 \$10,000 Matl handling 20 \$5.00 \$100 Qlty ctrl ins 15 \$20.00 \$300 Mach setups 6 \$14.00 \$84 \$11,734 Total Cost \$211,734 Divided by # of doors 2,500 \$84.69 Profitability Traditional ABC Cost \$91.70 \$84.69 plus: 40 %profit \$36.68 \$33.88 Total \$128.38 \$118.57...
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