Question

Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Activity:
MHs (Machining) Orders
Product Y7 1,150 610
Product V2 9,060 2,280
Total
10,210
2,890
What is the overhead cost assigned to Product V2 under activity-based costing? (Round your intermediate calculations to 2 decimal places and your final answer to nearest whole dollar.)
a) $20,976
b) $40,951
c) $70,560
d) $61,927

Answer 1

Answer:

d) $61,927

Explanation:

Base on the scenario been described in the question we can define Activity Based Costing is a way to calculate overhead by identifying activities and then allocating the costs of each activity to the products based on the usage of the activities.

The overhead cost assigned to Product V2 under activity-based costing is d) $61,927