Ask Question
22 November, 12:58

Assume that total costs assigned to the setup activity cost pool in March are $120,000 and 100 setups were completed in March. Further, assume that during March machines were setup 20 times to make product X5. The total setup cost that would be assigned to product X5 would be: Select one: A. $ 1,600 B. $16,000 C. $24,000 D. Cannot be determined

+1
Answers (1)
  1. 22 November, 16:38
    0
    The correct answer is C.

    Explanation:

    Giving the following information:

    Assume that the total costs assigned to the setup activity cost pool in March are $120,000 and 100 setups were completed in March.

    Further, assume that during March machines were setup 20 times to make product X5.

    First, we need to calculate the activity rate for setups.

    To calculate the estimated manufacturing overhead rate we need to use the following formula:

    Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

    Estimated manufacturing overhead rate = 120,000/100 = $1,200 per setup

    Now, we can allocate overhead:

    Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

    Allocated MOH = 1,200*20 = $24,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Assume that total costs assigned to the setup activity cost pool in March are $120,000 and 100 setups were completed in March. Further, ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers