81) Bombast Industries identified the following budgeted overhead activities and drivers:

Activity PoolsActivity Drivers

Machining$80,000Machine hours10,000

Setups15,000Number of setups5,000

Purchasing10,000Purchase orders2,000

Data associated with Job 786 follows.

Direct materials$1,000

Direct labour3,500

Machine hours300

Number of setups50

Purchase orders20

a. Calculate a unit-based overhead rate using machine hours.

b. What is the total cost of Job 786 using the above rate?

c. Calculate three activity-based overhead rates.

d. What is the cost of Job 786 using the above three activity rates?

e. Which method of overhead application (activity-based rates or budgeted factory overhead rate) is more accurate?



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