Reference no: EM132523753
Walt Favourites manufactures a wide variety of birthday decorative items. Walt's activity-based costing overhead rates are:
Purchasing $250 per order
Storing $8 per square metre
Machining $60 per machine hour
Supervision $20 per direct labour hour
The Disney's 75th Birthday Project involved five purchase orders, 2,000 square metres, 45 machine hours, and 25 direct labour hours. The cost of direct materials on the job was $35,000 and the direct labour rate is $15 per hour.
Question a) Calculate the total production costs of the Disney Project using activity-based costing.
Question b) Calculate the total production costs of the Disney Project using traditional costing, when manufacturing overhead is applied at 125% of direct labour cost.
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