申論題

4. The job costing system at Smith’s Custom Framing has five indirect cost pools
(purchasing, material handling, machine maintenance, product inspection, and packaging).
The company is in the process of bidding on two jobs; Job 215, an order of 15 intricate
personalized frames, and Job 325, an order of 6 standard personalized frames. The controller
wants you to compare overhead allocated under the current simple job-costing system and a
newly-designed activity-based job-costing system. Total budgeted costs in each indirect cost
pool and the budgeted quantity of activity driver are as follows:

(1) Compute the overhead allocation rate and the total overhead allocated to each job under a simple costing system, where overhead is allocated based on machine-hours.