Kam Company has the following cost pools, drivers, and pool rates for its activity-based costing system:...

Kam Company has the following cost pools, drivers, and pool rates for its activity-based costing system: Pool Driver Rate Design design hours $2,200 per design hour Creation machine hours $80 per MH Ordering of Parts number of orders $300 per order Al Company placed and order with Kam Company for 2,000 units of a custom product. The order required 15 design hours, 900 machine hours, and one parts order. How much overhead cost is assigned to Al's order using activity-based costing?

$72,000

$105,300

$105,000

Solutions

Expert Solution

Correct answer is option b.$105,300

Calculation of overhead cost of order using Activity based costing

Total overhead cost for the order =[ 2200*15 design hour] + [80* 900 machine hour] + [300 order cost]

=33,000+72,000+300

=105,300

ekkarill92 answered 2 years ago

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