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X Company uses an activity-based costing allocation system. On January 1, 2020, its accountant budgeted the...

X Company uses an activity-based costing allocation system. On January 1, 2020, its accountant budgeted the following costs and cost drivers for three of the activities that are used in the ABC system:

Activity Budgeted cost       Cost driver
Assembly $79,000       89,800 parts
Packaging $47,400       14,400 finished units
Purchasing $31,600       4,200 purchase orders


In May of 2020, 521 units of Product C were finished, requiring $18,400 of direct materials, 4,000 direct labor hours, 1,464 parts, and 38 purchase orders.

How much of the three activity costs was allocated to Product C?

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Expert Solution

Final Answer: $3,288
Note 1: Overhead allocation sheet
Product C
Activity Total OH Cost Total Cost Driver OH Rate Driver Incurred OH Cost assigned
Purchasing                79,000      89,800 0.88         1,464         1,288
packaging                47,400      14,400 3.29            521         1,714
Assembly                31,600         4,200 7.52               38            286
Total              158,000         3,288

ekkarill92 answered 1 year ago
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