Question

TG corp' s single predetermined overhead rate is $114 per direct labor hour. Under their ABC system they have 5 OH pools with the following rates: material handling $0.35 per part, lathe work $0.15 per lathe turn, milling $26 per machine hour, grinding $0.80 per part, and testing at $21 per unit tested. Based on the following information calculate the cost per unit for Job 421 using the ABC overhead system:

Direct material cost per job: $10,000 (job 420), $60,000 (job 421)

Direct manufacturing labor cost per job at $30/DLH: $750 (job 420), $12,000 (job 421)

Parts per job: 500 parts (job 420), 2,000 parts (job 421)

Lathe turns per job: 20,000 turns (job 420), 60,000 turns (job 421)

Machine hours per job: 170 MH (job 420), 970 MH (job 421)

Units per job (all units are tested): 10 unit (job 420), 200 units (job 421

Answer 1