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In: Accounting

A company calculated the predetermined overhead on an estimated overhead of $70,000, and the activity for...

A company calculated the predetermined overhead on an estimated overhead of $70,000, and the activity for the cost driver was estimated as 2,500 hours. If product A utilized 1,350 hours and product B utilized 1,100 hours, what was the total amount of overhead assigned to the products?

A. $35,000

B. $30,800

C. $37,800

D. $68,600

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Expert Solution

Answer: D. $68,600

Explanation

Estimated Overhead $ 70,000.00
Expected Use of Cost Drivers per Activity (Hours)      2,500.00
Activity-Based Overhead Rates (70,000 / 2,500) $     28.00
Cost Drivers Overhead Hours Total Overhead
Rates Utilized Assigned
(A) (B) (AxB)
Product A $       28.00                     1,350.00 $                         37,800.00
Product B $       28.00                     1,100.00 $                         30,800.00
$ 68,600.00

ekkarill92 answered 1 year ago
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