Durban Metal Products, Ltd., of the Republic of South Africa makes specialty met

Question

Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below: Activity Cost Pool Order size Customer orders Product testing Selling Activity Measure Activity Rate $ 17.10 per direct labor-hour Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls $ 354.00 per customer order $ 80.00 per testing hour $ 1,496.00 per sales call The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 140 direct labor-hours, 12 hours of product testing, and 3 sales calls. Required: Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order? Activity Cost Pool Order size Customer orders Product testing Selling Total overhead cost ABC Cost

Explanation / Answer

Activity cost pool ABC Cost Order size (140 direct labor hr × $17.10 per direct labor hr) $ 2,394 Customer orders (1 order × $354 per customer order) $ 354 Product testing (12 hrs of product testing × $80 per testing hr) $ 960 Selling (3 sales call × $1,496 per sales call) $ 4,488 Total overhead cost assigned to the order $ 8,196

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.