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Activity Based Costing

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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?

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Solution discusses activity based costing.

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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 ...

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