Activity rates from Quattrone Corporation\'s activity-based costing system are l

Question

Activity rates from Quattrone Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products:

Last year, Product F76D involved 5 customer orders, 475 assembly hours, and 24 batches. How much overhead cost would be assigned to Product F76D using the activity-based costing system?

a) $1,312.08

b) $3,151.88

c) $68,060.72

d) $1,298.57

  Activity Cost Pools Activity Rate   Processing customer orders $95.31 per customer order   Assembling products $2.87 per assembly hour   Setting up batches $54.67 per batch

Explanation / Answer

Answer: b) $3,151.88

=> overhead cost would be assigned to Product F76D using the activity-based costing system =

95.31 * 5 customer orders + 2.87 * 475 assembly hours + 54.67 * 24 batches = $3,151.88

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