2. c. The overhead cost of serving Kuszik Builders is computed as follows:
Making
Windows Processing
Orders Customer
Relations Total
Activity for Kuszik Builders ... 300 DLHs 2 orders 1 customer
Indirect factory wages... $ 360 $160 $ 400 $ 920
Production equipment depreciation ... 810 810
Other factory costs... 72 72
Administrative wages and salaries ... 60 900 960
Office expenses ... 12 40 52
Marketing expenses ... 0 0 1,500 1,500
Total cost... $1,242 $232 $2,840 $4,314
Example: $1.20 per DLH × 300 DLHs = $360
Activity rate for indirect wages for the activity making windows.
Case 8-33 (continued)
The overhead cost of serving Western Homes is computed as follows:
Windows Processing
Relations Total
Activity for Western Homes... 2,000 DLHs 3 orders 1 customer
Indirect factory wages... $2,400 $240 $ 400 $ 3,040
Production equipment depreciation.... 5,400 5,400
Other factory costs... 480 480
Administrative wages and salaries ... 90 900 990
Office expenses ... 18 40 58
Marketing expenses... 0 0 1,500 1,500
Total cost ... $8,280 $348 $2,840 $11,468
Example: $1.20 per DLH × 2,000 DLHs = $2,400
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