ABC Company manufactures two sizes of ceramic paperweights, regular and jumbo. The following information applies to their expectations for the planning period:
Cost Pool Overhead Costs Activity-cost driver
Materials handling $ 45,000 90,000 orders
Machine maintenance $300,000 15,000 maintenance hours
Setups $270,000 45,000 setups
Inspections $105,000 21,000 inspections
Total support costs $720,000
Direct Material used $2,000
Direct Labor $3,000
During October, ABC produced 700,000 regular ceramic paperweights and Mayan's production manager counted. The total machine budget hours is 72,000.
Actual Activity
2,000 orders
1,000 maintenance-hours
2,000 setups
2,000 inspections
Instructions answer the following questions and show all your computations.
1. Using ABC: Answer the following: (4 points)
For October, Mayan's controller assigned $________ indirect costs to the regular product line.
2. Using a single rate determine the manufacturing cost to the regular product line