Question

Hippity Hoppity Brew is a manufacturer of Small, Medium and Large size malting equipment for use in craft breweries across the United States and Canada. They are implementing an activity based cost (ABC) system and have compiled the following indirect cost information.

Cost Pool	Estimated Cost	Cost Driver	Est Total Cost Driver
Equipment Maintenance	$42871	Machine Hours	1500 Hours
Production Facility Costs	$83163	Footprint (sqft)	20000 Square Feet
Order Processing Costs	$20829	Num of Orders	200 Orders
Engineering Changes	$35728	Num of Changes	50 Changes
Customer Relations	$29334	Warranty Claims	30 Claims

During the period, the Medium sized equipment line at Hippity Hoppity Brew used 650 machine hours, used 6200 square feet of floor space, received 63 orders, experienced 13 engineering changes and had 8 warranty claims. $106300 of direct labor and $66266 of direct material were charged towards the Medium sized equipment line during the year.

Under the ABC system, how much total cost was charged to the Medium line during the year? round your answer to the whole dollar.

Answer 1

Under the ABC system, how much total cost was charged to the Medium line during the year? round your answer to the whole dollar.

Direct material	66266
Direct labour	106300
Manufacturing overhead
Equipment Maintenance (42871/1500*650)	18577
Production Facility Costs (83163/20000*6200)	25781
Order Processing Costs (20829/200*63)	6561
Engineering Changes (35728/50*13)	9289
Customer Relations (29334/30*8)	7822
Total cost charged to medium line	240596