Question

Larner Corporation is a diversified manufacturer of industrial goods. The company%u2019s activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Supporting direct labor $ 7.00 per direct labor-hour Machine processing $3.00 per machine-hour Machine setups $40.00 per setup Production orders $160.00 per order Shipments $ 120.00 per shipment Product sustaining $ 800.00 per productActivity data have been supplied for the following two products: Total Expected Activity J78 W52 Direct labor-hours 1,000 40 Machine-hours 3,200 30 Machine setups 5 1 Production orders 5 1 Shipments 10 1 Product sustaining 1 1 Required:Determine the total overhead cost that would be assigned to each of the products. (Omit the "$" sign in your response.) Activity Cost Pool J78 W52 Supporting direct labor $ $ Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost $ $

Answer 1

Answer and Explanation:

The computation of total overhead cost that would be assigned to each of the products is presented with the help of a spreadsheet:-

Here are the formulas from which we can determine the total cost of J78 and W52

For J78

Total cost = Activity rate of J78 × Expected activity of J78

For W52

Total cost = Activity rate of J78 × Expected activity of W52

The Spreadsheet has been attached.