Wings Co. budgeted $555,600 manufacturing direct wages, 2,315 direct labor hours, and had the following manufacturing overhead: Overhead Cost Pool Budgeted Overhead Cost Budgeted Level for Cost Driver Overhead Cost Driver
Materials handling $160,000 3,200 pounds Weight of materials
Machine setup 13,200 390 setups Number of setups
Machine repair 1,380 30,000 machine hours Machine hours
Inspections 10,560 160 inspections Number of inspections
Requirements for Job #971 which manufactured 4 units of product:
Direct labor 20 hours
Direct materials 130 pounds
Machine setup 30 setups
Machine hours 15,000 machine hours
Inspections 15 inspections
If Wings uses a volume-based overhead rate based on direct labor hours, the manufacturing overhead for Job #971 is:
a. $1,020.
b. $990.
c. $6,400.
d. $3,460.
e. $1,600.
Can you explain what volume based costing is? Is it another name for traditional costing? What are formulas I need to know for ABC and Volume based costing?