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9. Jackal Security Inc. provides security guards to shopping malls. Data related to Jackal’s overhead costs...

9. Jackal Security Inc. provides security guards to shopping malls. Data related to Jackal’s overhead costs for the current year are as follows: Head Office Activity Total Overhead Cost Cost Driver Estimated activity Supervision $128,000 # of employees 80 Technology fees 58,000 computer hours 2,000 Rent/Utility/Taxes 42,000 direct labour hours 160,000 Total $228,000 During the year, Jackal provided security to the Apple Creek Mall including five employees, 150 computer hours and 10,800 labour hours. Overhead applied to the Apple Creek Mall job for the year using ABC is a. $1,629.26 b. $15,185.00 c. $15,390.00 d. $17,100.00.

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Answer #1

OPTION: b. $15,185.00

WORKING:

SUPERVISION CHARGES PER EMPLOYEE=$128000/80 EMPLOYEES

                                                                   =$1600/EMPLOYEE

TECHNOLOGY FEES PER COMPUTER HOUR=$58000/2000 COMPUTER HOUR

                                                                      =$29/COMPUTER HOUR

RENT/UTILITY/TAXES PER DIRECT LABOUR HOUR=$42000/160000 DIRECT LABOUR HOURS                   

                                                                             =$0.2625/DIRECT LABOUR HOUR

CALCULATION OF TOTAL AMOUNT OF OVERHEAD APPLIED TO APPLE GREEK MALL JOB :

OVERHEAD ACTIVITY(COST DRIVER) AMOUNT
SUPERVISION CHARGES EMPLOYEE

   $8000

($1600X5)
TECHNOLOGY FEES COMPUTER HOUR

   $4350

($29X150)
RENT/UTILITY/TAXES DIRECT LABOUR HOUR

    $2835

($0.2625X10800)
TOTAL     $15185
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