Answer: $465,000
Explanation:
The activity-based costing (ABC) is used to know the total cost of activities that is vital to make a product. In ABC system, for every activity which goes into production, a cost will be assigned.
Based on the figures in the question, the following can be deduced:
Machining:
= 299,000/13,000 × 7,000
= 23 × 7,000
= $161,000
Machine set up:
= 240,000/400 × 150
= 600 × 150
= $90000
Product design:
= 80,000/2
= $40,000
Order size:
= 290,000/10,000 × 6,000
= 29 × 6,000
= $174,000
Total = $161,000 + $90,000 + $40,000 + $174,000
= $465,000
The total manufacturing overhead cost that would be assigned to Product H27T is $465,000.
The total manufacturing overhead cost that would be assigned to Product H27T is $465,000.
Product H27T Machining = $299,000/13,000 × 7,000
Product H27T Machining = $23 × 7,000
Product H27T Machining = $161,000
Product H27T Machine set up = $240,000/400 × 150
Product H27T Machine set up = $600 × 150
Product H27T Machine set up = $90000
Product H27T Product design = $80,000/2
Product H27T Product design = $40,000
Product H27T Order size = $290,000/10,000 × 6,000
Product H27T Order size = $29 × 6,000
Product H27T Order size = $174,000
Total manufacturing overhead cost = $161,000 + $90,000 + $40,000 + $174,000
Total manufacturing overhead cost = $465,000
In conclusion, the total manufacturing overhead cost that would be assigned to Product H27T is $465,000.
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