Tandem Company manufactures two products (D and F). The overhead costs ($84,000)
ID: 2546645 • Letter: T
Question
Tandem Company manufactures two products (D and F). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers:
Product
Number of Setups
Machine Hours
Packing Orders
D
10
500
75
F
10
2,000
175
Cost per pool
$11,000
$60,000
$18,750
Using functional-based costing, what is the amount of overhead cost to be assigned to Product D using machine hours as the allocation base?
$12,000
$60,000
$48,000
$16,800
Product
Number of Setups
Machine Hours
Packing Orders
D
10
500
75
F
10
2,000
175
Cost per pool
$11,000
$60,000
$18,750
Explanation / Answer
The amount of overhead cost to be assigned to Product D using machine hours as the allocation base is:
= [($11,000 + $60,000 + $18,750) / 2,500] × 500
= $17,950
All the options given are incorrect.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.