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Prepare a report showing the overhead cost of the order for hard rock drills according to the ABC system. What is the total overhead cost assigned to the order?
Ace Mining Tools Ltd. of Calgary makes specialty tools used in the mining industry. The company uses an ABC system for internal decision making. The company has four activity cost pools, as listed below:
| Activity Cost Pool | Activity Measure | Activity Rate |
| Order size | Direct labour-hours | $17.60 |
| Customer orders | Customer orders | $360.00 |
| Product testing | Testing hours | $79.00 |
| Selling | Sales calls | $750.00 |
The managing director of the company would like information concerning the cost of a recently completed order for hard-rock drills. The order required 100 direct labour-hours, 20 hours of product testing, and five sales calls.
Required:
Prepare a report showing the overhead cost of the order for hard rock drills according to the ABC system. What is the total overhead cost assigned to the order?
Solutions
Expert Solution
According to these calculations, the total overhead cost of the order is $7,450.
Renze Joy Candido answered 1 year agoRelated Solutions
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