Envision Company uses activity-based costing (ABC) for allocating manufacturing overhead costs to jobs and it has established the following cost drivers and rates:
During July, Job #2005 produced 1,500 units and required the following activity: 1,800 parts, 2 production runs, and 325 direct labor hours.(a.) Calculate the amount of manufacturing overhead applied to Job #2005.(b.) Explain the advantage of using the ABC approach.

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The Answer of Envision Company uses activity-based costing (ABC) for allocating manufacturing overhead costs to jobs and it has established the following cost drivers and rates:
During July, Job #2005 produced 1,500 units and required the following activity: 1,800 parts, 2 production runs, and 325 direct labor hours.(a.) Calculate the amount of manufacturing overhead applied to Job #2005.(b.) Explain the advantage of using the ABC approach.

Envision Company Uses Activity-Based Costing (ABC) for Allocating Manufacturing Overhead