In: Accounting
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
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.