Question

Roca, Inc., manufactures and sells two products: Product M6 and Product X7. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Activity Measures Estimated MOH Cost Expected Activity Product M6 Product X7 Total Labor related DLH $152,100 3,000 4,800 7,800 Product orders orders $63,035 400 300 700 Order size Machine hours $505,452 3,700 3,600 7,300 The total overhead to be applied to Product X7 using activity-based costing is closest to:

Answer 1

Answer:

$369,879

Explanation:

The computation of the total overhead to be applied is shown below:

                                                                                   Product X7

Activity Cost  Estimated  Expected  Activity  Expected  Overhead

Pool               Overhead   Total         Rate     Activity       applied

               Cost            Activity

Labor

-related          $152,100      7,800     $19.50     4800     $93,600

Production

orders        $63,035      700    $90.05     300      $27,015

Order size      $505,452    7300      $69.24     3600       $249,264

Total                $720,587                                                    $369,879