Question

Problem C-1A Applying activity-based costing LO P1, P2, A1,

[The following information applies to the questions displayed below.]

Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records.

Production Activity	Indirect Labor				Indirect Materials				Other Overhead
Grinding		$	330,000
Polishing						$	135,000
Product modification			500,000
Providing power										$	255,000
System calibration			590,000

Additional information on the drivers for its production activities follows.

Grinding and Polishing	9,000	machine hours
Product modification	2,200	engineering hours
Providing power	17,000	direct labor hours
System calibration	200	batches

Problem C-1A Part 3

	Job 3175		Job 4286
Number of units	180	units	2,250	units
Machine hours	300	MH	3,000	MH
Engineering hours	29	eng. hours	26	eng. hours
Batches	25	batches	75	batches
Direct labor hours	440	DLH	3,960	DLH

3. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286? (Round average overhead cost per unit to 2 decimal places.)

Answer 1

3. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286?

Activities	Estimated overhead cost	Expected activity	Activity rate	Job 3175	Job 4286
Grinding and Polishing	465000	9000 Machine hour	51.67 per machine hour	15500	155000
Product modification	550000	2200 Engineering hour	250 per engineering hour	7250	6500
Providing power	255000	17000 Direct labour hour	15 per labour hours	6600	59400
System calibration	590000	200 Batches	2950 per batch	73750	221250
Total overhead				103100	442150
Units				180	2250
Overhead cost per unit				572.78	196.51