Activity based costing

Activity based costing - hours total $143,400 Northstar...

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This material is produced by the SI Program at Arizona State University student success .asu.edu { collaborative peer-led structured group study SI Northstar 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 costs Allocation base Materials handling $12,000 Number of parts Machine setup $3,400 Number of setups Insertion of parts $48,000 Number of parts Finishing $80,000 Finishing direct labor
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Unformatted text preview: hours total $143,400 Northstar expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 3,000 parts, require 10 setups, and consume 2,000 hours of finishing time. Job 1 actually used 150 parts, required 1 setup, and consumed 120 finishing hours. Job 2 actually used 425 parts, required 2 setups, and consumed 320 finishing hours. 1) If Northstar allocated overhead based only on the number of setups, how much overhead would be allocated to each job? 2) Compute the cost allocated rate for EACH activity. 3) Compute the manufacturing overhead cost allocated to job 1. 4) Compute the manufacturing overhead cost allocated to job 2....
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This note was uploaded on 02/28/2011 for the course ACC 241 taught by Professor Karengeiger during the Fall '08 term at ASU.

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