Perk Company produces three products: Tic, Tac, and Toe. Tic requires 90 machine setups, Tac requires...

Perk Company produces three products: Tic, Tac, and Toe. Tic requires 90 machine setups, Tac requires 80 setups, and Toe requires 330 setups. Berk has identified an activity cost pool with allocated overhead of $18,000 for which the cost driver is machine setups. How much overhead is assigned to the Tic product?

Expert Solution

Predetermined OH rate = Total OH cost/ machine hour of cost driver

= 18000/ (90+80+330)

= 18000/500

= 36

OH assigned to Tic product = 90* 36 = $3240

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ekkarill92 answered 2 years ago

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