Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Setting up batches $ 59.71 per batch Processing customer orders $ 73.05 per customer order Assembling products $ 4.40 per assembly hour Data concerning two products appear below: Product K91B Product F65O Number of batches 92 63 Number of customer orders 42 56 Number of assembly hours 496 903 How much overhead cost would be assigned to Product K91B using the activity-based costing system

Question

Business

Ashlee Haynes

2 February, 13:59

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Setting up batches $ 59.71 per batch Processing customer orders $ 73.05 per customer order Assembling products $ 4.40 per assembly hour Data concerning two products appear below: Product K91B Product F65O Number of batches 92 63 Number of customer orders 42 56 Number of assembly hours 496 903 How much overhead cost would be assigned to Product K91B using the activity-based costing system

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Answers (1)

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Reese Higgins · Answer 1

Product K91B = $10,743.82

Explanation:

Giving the following information:

Activity Cost Pool Activity Rate

Setting up batches $ 59.71 per batch

Processing customer orders $ 73.05 per customer order

Assembling products $ 4.40 per assembly hour

Product K91B

Number of batches 92

Number of customer orders 42

Number of assembly hours 496

We were given the allocation rates, all we need to do is allocate based on actual allocation base:

Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

Product K91B = 59.71*92 + 73.05*42 + 4.4*496

Product K91B = $10,743.82