Last year, Product H50E involved 9 customer orders, 666 assembly hours, and 77 batches. How much overhead cost would be assigned to Product H50E using the activity-based costing system?

Activity rates from Lippard 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

Setting up batches $46.61 per batch

Processing customer orders $31.62 per customer order

Assembling products $2.86 per assembly hour

Last year, Product H50E involved 9 customer orders, 666 assembly hours, and 77 batches. How much overhead cost would be assigned to Product H50E using the activity-based costing system?

$60,979.68
$3,588.97
$5,778.31
$81.09

Solutions

Expert Solution

The correct answer is as follows:

Overhead cost = 9*31.62+666*2.86+77*46.61

= 5778.31

Hence, the correct answer is option (C), 5778.31

ekkarill92 answered 2 years ago

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