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23 July, 15:20

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:

Activity Cost Pool Activity Rate

Setting up batches $59.06 per batch

Processing customer orders $72.66 per customer order

Assembling products $3.75 per assembly hour

Data concerning two products appear below:

Product K91B Product F65O

Number of batches 86 57

Number of customer orders 36 50

Number of assembly hours 490 897

Required:

How much overhead cost would be assigned to Product K91B using the activity-based costing system? (Round your intermediate calculations and final answers to 2 decimal places.)

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Answers (1)
  1. 23 July, 15:34
    0
    Total allocated overhead = $9,532.42

    Explanation:

    Giving the following information:

    Activity Rate

    Setting up batches = $59.06 per batch

    Processing customer orders = $72.66 per customer order

    Assembling products = $3.75 per assembly hour

    Product K91B

    Number of batches 86

    Number of customer orders 36

    Number of assembly hours 490

    To allocate overhead, we need to use the following formula on each activity rate:

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

    Setting up = 59.06*86 = 5,079.16

    Processing = 72.66*36 = 2,615.76

    Assembling = 3.75*490 = 1,837.5

    Total allocated overhead = $9,532.42
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Home » Business » Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Setting up batches $59.06 per batch Processing customer orders $72.
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