Lakeside Inc. manufactures four lines of remote control boats and uses activity-

Question

Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to calculate product cost.

Suppose the Speedy boat requires 2,800 machine hours, 93 batches, and 300 inspections. Using the activity rates, determine the amount of overhead assigned to the Speedy product line. (Round intermediate calculations to 2 decimal places and your final answers to the nearest dollar amount.)

Activity Cost Pools Estimated Total Cost Estimated Cost Driver Machining $ 327,000 12,700 machine hours Setup 64,000 380 batches Quality control 97,000 730 inspections

Explanation / Answer

activity rate per:

Machine hour=(327000/12700)=$25.75(approx)

batches=(64000/380)=$168.42(approx)

inspections=(97000/730)=$132.88(approx)

Hence total overhead assigned=(25.75*2800)+(168.42*93)+(132.88*300)

which is equal to

=$127627(approx).

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