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Activity Based Costing

The job costing system of Johnsons custom shop has five activities that are used as indirect cost pools

2011 budgeted ovhd 2011 budgeted base
Purchasing $70,000 2,00 purchase Orders
material Handling $87500 5,000 Material moves
maintenance $237,300 10,500 Machine hrs
Inspection $18,900 1,200 Inspections
Packaging $39,900 3,800 Units Produced

A possible job that will require $10,000 in materials, $2,000 in labor, 110 purchase orders, 200 material moves, 500 machine hours, 25 inspections , and will result in 500 units produced is received.

How much should we bid for this job if we require a 20% profit?

Solution Preview

Please see the attached Excel file.

Activity Based Costing
The job costing system of Johnsons custom shop has five activities that are used as indirect cost pools

2011 budgeted ovhd 2011 ...

Solution Summary

Solution discusses activity based costing.

$2.19