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 Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls $ 17.80 per direct labor-hour $ 362.00 per customer order $ 73.00 per testing hour $1,492.00 per sales cal1 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 170 direct labor-hours, 12 hours of product testing, and 3 sales calls Required What is the total overhead cost assigned to the order for heavy-duty trailer axles? ABC Cost Activity Cost Pool Order size Customer orders Product testing Selling Total overhead cost

Explanation / Answer

Answer:-

Durban Metal Products Ltd. Total Overhead costs Activity Based Cost method Activity cost pool Activity rate (a) Activity (b) ABC cost (c=a*b) $ Order size $17.80 per direct labor hour 170 direct labor hours 3026 Customer orders $362 per customer order 1 customer order 362 Product testing $73 per testing hour 12 hours of prduct testing 876 Selling $1492 per sales call 3 sales call 4476 Totals 8740

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

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