Blackwelder Co. manufactures a variety of electric razors used by both men and women. The…
Blackwelder Co. manufactures a variety of electric razors used by both men and women. The company’s plant is partially automated. The company uses an activity-based cost system. Listed below is cost driver information used in the product-costing system:
|
Overhead Cost pool |
Budgeted Overhead Cost |
Budgeted Cost Driver Level |
Cost Driver |
|
Machine depreciation/ |
$227,500 |
25,000 |
Machine hours |
|
Maintenance Factory depreciation/ Utilities/insurance |
154,940 |
25,400 |
Machine hours |
|
Product design |
665,720 |
35,600 |
Hours in design |
|
Material purchasing/storing |
1,293,760 |
124,400 |
Raw materials |
Two current product orders had the following requirements:
|
Men’s Razors |
Women’s Razor |
|
|
Units produced and sold |
26,000 |
30,000 |
|
Direct labor hours |
50 |
40 |
|
Pounds of raw materials |
980 |
1,120 |
|
Hours in design |
32 |
38 |
|
Machine hours |
85 |
60 |
Required:
1. Using ABC costing, how much overhead is assigned to the order for men’s razors?
2. Using ABC costing, how much overhead is assigned to the order for women’s razors?
