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9 September, 07:53

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:

Information is given as Activity Cost Pool; Amount; Activity Rate

Setting up batches; $59.06; per batch

Processing customer orders; $72.66; per customer order

Assembling products; $3.75; per assembly hour

Data concerning the two products is below:

Product K91B:

Number of batches = 84; number of customer orders = 32; number of assembly hours = 483

Product F650:

Number of batches = 50; number of customer orders = 43; number of assembly hours = 890

How much overhead cost would be assigned to Product K91B using the activity-based costing system?

a. $9,097.41

b. $81,146.53

c. $4,961.04

d. $135.47

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Answers (1)
  1. 9 September, 08:26
    0
    a. $9,097.41

    Explanation:

    The computation of the overhead cost assigned to Product K91B is shown below:

    = Setting up batches * number of batches + Processing customer orders * number of customer orders + Assembling products * number of assembly hours

    = $59.06 per batch * 84 + $72.66 per customer order * 32 + $3.75 number of assembly hours * 483

    = $4,961.04 + $2,325.12 + $1,811.25

    = $9,097.41
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