Jeanlouis, Inc., manufactures and sells two products: Product D0 and Product D5.

Question

Jeanlouis, Inc., manufactures and sells two products: Product D0 and Product D5. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

The total overhead applied to Product D5 under activity-based costing is closest to:

$304,920

$125,286

$319,252

$273,240

Estimated Expected Activity
Activity Cost Pools Activity Measures
Overhead Cost
Product D0
Product D5
Total Labor-related DLHs $313,743 3,600 3,300 6,900 Production orders orders 70,264    300    500    800 General factory MHs 253,555 4,300 4,200 8,500 $637,562

Explanation / Answer

The total overhead applied to Product D5 under activity-based costing is closest to =

3300/6900 * 313743 + 500/800*70264 + 4200/8500 * 253555 = $319252

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