Franklin Manufacturing manufactures two models of windows, bay windows and casement windows. Franklin uses an activity-based costing system. The following information about the activities used to produce the company's products has been provided.

Category Estimated Cost Cost Driver Bay Windows Casement

Unit-level $ 149,000 Labor hours 870 620

Batch-level $ 64,800 Inspections 25 15

Product-level $ 34,000 Storage Space 4,700 sq feet 3,300 sq feet

Facility-level $ 208,800 Machine hours 10,200 7,200

The amount of batch-level cost that should be allocated to the bay windows equals:

level of batch cost allocated to Bay = $40,500

Explanation:

Given;

Unit-level = $ 149,000

Labor hours = 870 620

Batch-level = $ 64,800 Inspections 25 15

Product-level = $ 34,000 Storage Space 4,700 sq feet 3,300 = sq feet

Facility-level $ 208,800

Machine hours = 10,200 7,200

To calculate the overhead activity rate, we use this method

Overheads Activity rate = Activity overhead / number of cost drivers

Level of overhead activity rate = Batch level overhead / of inspection

Level of batch activity rate = $ 64,800: (25+15)

Level of batch activity rate = $64,800:40

= $1620

level of batch cost allocated to Bay

level of batch cost allocated to Bay = level of batch activity rate * No of inspection for Bay

level of batch cost allocated to Bay = $1620 * 25

level of batch cost allocated to Bay = $40,500

level of batch cost allocated to Bay = $40,500