ACC 349 Week 3 Team Assignment Problems Ch. 4

Apr 19th, 2015
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ACC 349 Week 3 Team Assignment Problems Ch. 4

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Team CACC/349P4-3A Stellar Stairs Co. of Poway designs and builds factory-made premium wooden stairs for homes. The manufactured stair components (spindles, risers, hangers, hand rails) permit installation of stairs of varying lengths and widths. All are of white oak wood. Its budgeted manufacturing overhead costs for the year 2006 are as follows. Overhead Cost Pools AmountPurchasing $ 57,000Handling materials 82,000Production (cutting, milling, finishing) 210,000Setting up machines 85,000Inspecting 90,000Inventory control (raw materials and finished goods) 126,000Utilities 180,000Total budget overhead costs $830,000For the last 4 years, Stellar Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2006, 100,000 machine hours are budgeted. Heather Fujar, owner-manager of Stellar Stairs Co., recently directed her accountant, Lindsay Baker, to implement the activity-based costing system that she has repeatedly proposed. At Heather Fujar's request, Lindsay and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools.Expected Use ofActivity Cost Pools Cost Drivers Cost DriversPurchasing Number of orders 600Handling materials Number of moves 8,000Production (cutting, milling, finishing) Direct labor hours 100,0

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