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Hane Corporation uses the following activity rates from its activity-based costing to assign overhead costs to...

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

Activity Cost Pools Activity Rate Assembling products $8.90 per assembly hour

Processing customer orders $31.23 per customer order

Setting up batches $43.72 per batch

Data for one of the company's products follow:

Product U94W

Number of assembly hours 389

Number of customer orders 53

Number of batches 61

How much overhead cost would be assigned to Product U94W using the activity-based costing system?

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Expert Solution

Overhead cost should be sum total of all the costs based on their activity

Assembling cost = $8.9 per hour * 389 hours = 3462

Processing Customer Order = 31.23 per order * 53 orders = 1655.19

Setting up cost = 43.72 per batch * 61 batches= 2666.92

Total cost allocated to U94W = 3462+1655 + 2666.92 = 7784.11

ekkarill92 answered 2 years ago
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