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Jackson Painting paints the interiors and exteriors of homes and commercial buildings
Jackson Painting paints the interiors and exteriors of homes and commercial buildings. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its activity-based costing system.
Activity Cost Pool Activity Measure Annual Activity Painting overhead Square metres 10,000 square metres Job support Jobs 320 jobs Other None Not applicable
The "Other' activity cost pool consists of the costs of idle capacity and organization-sustaining costs.
The company has already finished the first stage of the allocation process in which costs were allocated to the activity cost centres. The results are listed below:
Painting Job Support Other Total Painting overhead $56,000 $43,000 $24,000 $120,000 Office expense 18.2XL 92.2.(Q 56 ..Q_QQ 160,04 Total $74.000 $135,200 $80.000 $289.200
Required:
a) Compute the activity rates (i.e., cost per unit of activity) for the Painting and Job Support activity cost pools by filling in the table below Round off all calculations to the nearest whole cent.
Painting
Job Support
Production overhead
Office expense
Expert Solution
| a) Computation of Activity rates: | |
| Painting = $56,000/10,000sqm = $5.60 per sqm | |
| Job support = $43,000/320 jobs = $134.375 per job |
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