CHAPTER 6

Total Costing Problem PA3

Budget:
Purchasing $70,000
Handling Materials $33,333
Maching Set Ups $70,500
Inspections $25,500
Utilities $45,000

Cost Divers:
Orders 700
Material Moves 1334
Machine Set up 15000
Number of Inspections 5000
Square Feet 180000

Question: Recent success has yielded an order for 1,000 tables. Assume direct labor cost
Activity:
Order (units) 1000
Direct Materials 112700
Machine House 15200 WORK:
Direct Labor Hours 5300
Number of purchace orders 60
Number of material moves 800 Purchasing: 60* ($70,000/700) = $6,000
Number of machine set ups 100 Material moves: 800*($33,333/1,334) = $19,98
Number of inspections 450 Machine Set up: 100*($70,500/15,000) = $470
Number of square feet Oc 8000 Inspections: 450*($25,500/5000) = $2,295
Utilities: 8,000*($45,000/180,000) = 2,000
Answers: Cost Assigned
Direct Materials $106,000
Purchasing $6,000
Direct Labor $106,000
Number of Material Moves $19,990
Number of Machine Set up $470
Number of Inspections $2,295
Number of Square feet $2,000
Total Order Cost $ 242,755.00
Assume direct labor costs per hour of $20. Determine how much the job would cost given the fol

* ($70,000/700) = $6,000
: 800*($33,333/1,334) = $19,989.80
: 100*($70,500/15,000) = $470
0*($25,500/5000) = $2,295
*($45,000/180,000) = 2,000
cost given the following activities: