Hansen Company Uses Activity-Based Costing

question 19

Essay

Hansen Company uses activity-based costing.The factory overhead budget for the coming period is $1,053,000,consisting of the following: The potential allocation bases and their estimated amounts were as follows: ​
a.Determine the overhead rate for each cost pool,using the most appropriate allocation base for each pool.
b.Job 80130 required $45,000 for direct materials,$20,000 for direct labor,2,000 direct labor hours,800 machine hours,five setups,and four design changes.Determine the cost of Job 80130.
c.Determine the cost of Job 80130 if Hansen used the direct labor hour method of applying overhead.
d.What is the reason behind the difference in the costs of the job using Activities-based costing vs.the direct labor hour method of applying overhead?

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Definitions:

Sequential System

A system that processes data or events in a specific order, one at a time.

Problem Statement

A specific challenge or issue that needs addressing or solving in a particular field or context.

Input Data

The information or signals entered into a computer system for processing or analysis.

Integrated Development Environment

An Integrated Development Environment (IDE) is a software application providing comprehensive facilities to computer programmers for software development, including a source code editor, build automation tools, and a debugger.