Fountain Company Uses Activity-Based Costing (ABC) for Allocating Manufacturing Overhead

question 8

Essay

Fountain Company uses activity-based costing (ABC) for allocating manufacturing overhead costs to jobs and it has established the following cost drivers and rates: $\begin{array}{lll} \underline {\text { Activity }} & \underline {\text { Cost Driver }} & \underline {\text { Rate } }\\ \text { Material handling } & \text { Number of parts used } & \$ 5.00 \text { per part } \\\text { Machine setups }& \text { Number of production runs } & \$ 2.000 .00 \text { per run } \\\text { Assembly and inspection } & \text { Number of direct labor hours } & \$ 25.00 \text { per DLH } \\\text { Quality control }&\text { Number of units inspected } & \$ 4.00 \text { per unit } \end{array}$
During April, Job #7598 produced 2,500 units and required the following activity: 1,200 parts, 2 production runs, and 225 direct labor hours.
(a.) Calculate the amount of manufacturing overhead applied to Job #7598.
(b.) Explain the advantage of using the ABC approach.

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Definitions:

Positive Symptoms

Observable manifestations such as hallucinations or delusions, typically associated with conditions like schizophrenia.

Negative Symptoms

In the context of psychiatric disorders, such as schizophrenia, these are symptoms that represent a reduction or absence of normal functions, like emotional expression or motivation.

Schizophrenia

A severe mental disorder characterized by disturbances in thought, perception, and behavior, leading to a disconnect from reality.

Late Teens

The age period that typically encompasses ages 17 to 19, marking the transition from adolescence to adulthood.