Question

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

Activity Cost Pools Activity Rate

Setting up batches $92.68 per batch

Processing customer orders $95.08 per customer order

Assembling products $3.41 per assembly hour

Last year, Product N79A required 28 batches,

6 customer orders, and 712 assembly hours.

Required:

How much total overhead cost would be assigned to Product N79A using the company's activity-based costing system?

Answer 1

Answer:

$5,593.44

Explanation:

The computation of the total overhead cost assigned to Product N79A using the activity based costing is shown below:

Total overhead cost assigned is

= Setting up batches cost + processing customer orders cost + assembly products cost

As we know that

Overhead Cost assigned = Activity Rate × Number of activity

So,

Setting up batches cost = $92.68 × 28 batches  = $2,595.04

Processing customer orders cost =  $95.08 × 6 customer orders = $570.48

And,

Assembling products cost = $3.41 × 712 assembly hours = $2,427.92

So,

Total overhead cost assigned to Product N79A is

= $2,595.04 + $570.48 + $2,427.92

= $5,593.44