The following overhead cost information is available for Henderson, Inc. for 20X
ID: 2491791 • Letter: T
Question
The following overhead cost information is available for Henderson, Inc. for 20XX:
Activity Allocation Base Overhead Cost
Purchasing Number of purchase orders $40,000
Receiving Number of shipments received $25,000
Machine setups Number of setups $30,000
Quality control Number of inspections $20,000
During the year, 2,000 purchase orders were issued; 800 shipments were received; 3,000 machine setups were performed; and 2,500 inspections were conducted.
Required: If Job #101 required 3 purchase orders, 4 shipments, 4 machine setups, and 2 inspections to complete, how much overhead should be assigned to Job #101?
Explanation / Answer
TOTAL OF ACTIVITY DERIVER JOB 101 OVERHEAD ALLOTATED TO JOB 101 DATA RELATED TO VARIOUS ALLOCATION BASE OF JOB 101 Purchasing Number of purchase orders $40,000 2000 3 60 Receiving Number of shipments received $25,000 800 4 125 Machine setups Number of setups $30,000 3000 4 40 Quality control Number of inspections $20,000 2500 2 16 OVERHEAD ASSIGNED TO JOB 101 241
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