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The job costing system at Smith's Custom Framing has five indirect cost pools ( purchasing, material handling, machine maintenance, product...
The job costing system at Smith's Custom Framing has five indirect cost pools ( purchasing, material handling, machine maintenance, product inspection, and packaging). The company is in the process of bidding on two jobs; Job 215, an order of 15 intricate personalized frames, and Job 325, an order of 6 standard personalized frames. The controller wants you to compare overhead allocated under the current simple job- costing system and a newly- designed activity- based job- costing system. Total budgeted costs in each indirect cost pool and the budgeted quantity of activity driver are as follows:
