compute the operating income from the crockett engagement using the abc system 556818

Using ABC to allocate costs and compute profit

Refer to Short Exercises 18 7 and 18 8. Suppose Pacific’s direct labor rate was $310 per hour, the documentation cost was $34 per page, the information technology support cost was $200 per application, and training costs were $110 per direct labor hour. The Crockett engagement used the following resources last month:

Cost Driver

Crockett

Direct labor hours

150

Pages

320

Applications used

75

Requirements

1. Compute the cost assigned to the Crockett engagement, using the ABC system.

2. Compute the operating income from the Crockett engagement, using the ABC system.

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