Question

In: Accounting

Activity rates from Quattrone Corporation's activity-based costing system are listed below. The company uses the activity...

Activity rates from Quattrone Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products:
  Activity Cost Pools Activity Rate
  Processing customer orders $95.88 per customer order
  Assembling products $2.76 per assembly hour
  Setting up batches $53.30 per batch

Last year, Product F76D involved 3 customer orders, 496 assembly hours, and 27 batches. How much overhead cost would be assigned to Product F76D using the activity-based costing system?

Multiple Choice

  • $1,439.10

  • $3,095.70

  • $68,004.54

  • $1,242.39

Solutions

Expert Solution

Answer is $3,095.70 as calculated below:

Activity cost pools Activity rate Product F76D costing Product F76D amount
Processing customer orders 95.88 3 $                            287.64
Assembling products 2.76 496 $                        1,368.96
Setting up batches 53.3 27 $                        1,439.10
Total cost to be assigned $                        3,095.70


The other options are incorrect as they include only batches value.

ekkarill92 answered 2 years ago
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