Answered>Order 3638
Cost Pool:
Machine Maintenance Cost – $200,000
Engineering Charge Orders – $100,000
Hazardous Waste Disposal – $30,000
Cost Driver Usage / Cost Pool Rate
Number Machine Hours – 8,000 / $25.00
Number of Charge Orders – 1,250.00 / $80.00
Gallons of Hazardous Waste Generated – 800 / $375.00
During the year, Yacht #633 was started and completed:
DM cost per lb. – $55
Lbs. of DM used on job – 170
DL cost per hr. – $20.00
DLH used – 50
a. Calculate the cost of Yacht #633 using the Serenity’s current method of allocating manufacturing overhead.
b. Calculate the cost of Yacht #633 using the proposed activity based costing system. How is this information useful to an environmental management accounting (EMA) system?
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