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Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has...

Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system: Activity Cost Pool (and Activity Measure) Total Cost Machine related (machine-hours) $ 135,200 Batch setup (setups) $ 604,800 Order size (direct labor-hours) $ 121,500 Total Activity Activity Cost Pools Product X Product Y Total Machine related 1,400 6,600 8,000 Batch setup 2,900 5,100 8,000 Order size 6,400 2,600 9,000 The total amount of overhead cost allocated to Product X would be closest to:

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Expert Solution

Overhead Assigned to Product X $ 3,29,300

Working:

a. Calculation of activity rates
Activity Cost Pool Total Overhead Cost Activity Measure Activity Rates
(a) Product X (b) Product Y (c Total Quantity(d)=(b)+(c (a)/(d)
Machine related $                      1,35,200                      1,400                       6,600                8,000 $              16.90
Batch Setup $                      6,04,800                      2,900                       5,100                8,000 $              75.60
Order Size $                      1,21,500                      6,400                       2,600                9,000 $              13.50
b.
Calculation of Overhead Assignment to Product X:
Activity Cost Pool Activity Measure Activity Rates Overhead Assigned
Machine related                                1,400 $                 16.90 $                23,660
Batch Setup                                2,900 $                 75.60 $            2,19,240
Order Size                                6,400 $                 13.50 $                86,400
Overhead Assigned to Product X $            3,29,300

ekkarill92 answered 1 year ago
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