M4-10 Assigning Costs Using Activity Proportions [LO 4-5] Lakeside Inc. manufact

Question

M4-10 Assigning Costs Using Activity Proportions [LO 4-5] Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to calculate product cost. Estimated Total Cost S329,000 13,500 machine hours Activity Cost Pools Machining Setup Quality control Estimated Cost Driver batches 66,000 400 03,000870 870 inspections Suppose the Luxury boat requires 4,550 machine hours, 165 inspections, and 56 batches. Using activity proportions, determine the amount of overhead assigned to the Luxury product line Round your intermediate calculations to the nearest whole percentage and your final answer to the nearest whole number.) Cost Pool Machining Setup Costs Quality Control Total Overhead Allocated Overhe S

Explanation / Answer

Particulars Amount a Activity Driver No of Activity b Cost per activity c= a/b Machining                       329,000.00 Machine hours                13,500.00                        24.37 Setup                          66,000.00 Batches                      400.00                      165.00 Quality Control                       103,000.00 Inspections                      870.00                      118.39 Total Overhead                       498,000.00 Cost Pool Allocated overhead Machining = 4550 *24.37                       110,883.50 Setup costs = 56*165                            9,240.00 Qualit Control = 165 *118.39                          19,534.35 Total Overhead                       139,657.85

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