Answer:
option (a) Widgets $2,400,000, Gadgets $1,800,000, Targets $5,400,000
Step-by-step explanation:
Data provided in the question:
Allocated estimated overhead = $9,600,000
Expected use of cost drivers for the activity = 800,000 inspections.
Inspections required by Widgets = 200,000
Inspections required by Gadgets = 150,000
Inspections required by Targets = 450,000
Therefore,
Total overhead per activity =
=
= $12 per activity
Thus,
Overhead allocated to Widgets = 200,000 × 12 = $2,400,000
Overhead allocated to Gadgets = 150,000 × 12 = $1,800,000
Overhead allocated to Target = 450,000 × 12 = $5,400,000
Hence, The correct answer is option (a)
