Gould Corporation uses the following activity rates from its activity-based cost

Question

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:

Activity Cost Pool Activity Rate Setting up batches Processing customer orders Assembling products $59.46 per batch $72.90 per customer order $ 4.15 per assembly hour Data concerning two products appear below: Product Product Number of batche Number of customer orders Number of assembly hours K91B 87 37 491 F650 58 51 898 How much overhead cost would be assigned to Product K91B using the activity-based costing system? Multiple Choice $9,90797 $89,171.73 $5,173.02 $136.51

Explanation / Answer

A. $9,907.97

Activity Cost Pool Activity Rate(a) Total Activity(b) ABC Cost(a) × (b) Setting up batches $59.46 per batch 87 batches $5,173.02 Processing customer orders $72.90 per order 37 orders $2,697.3 Assembling products $4.15 per AH 491 AHs $2,037.65 $9,907.97

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