Question

Doles Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Activity Cost Pools Activity Rate Setting up batches $ 70.72 per batch Processing customer orders $ 27.78 per customer order Assembling products $ 12.81 per assembly hour Data concerning two products appear below: Product K52W Product X94T Number of batches 66 53 Number of customer orders 46 31 Number of assembly hours 419 162 Required: How much overhead cost would be assigned to each of the two products using the company's activity-based costing system

Answer 1

Answer and Explanation:

The computation of the overhead cost assigned is shown below:

Particulars                    Product K52W            Product X94T    

Setting up cost            $4,667.52                   $3,784.16

                                    ($70.72 × 66)                ($70.72 × 53)  

Order processing cost $1,277.88                 $861.18

                                ($27.78 × 46)                 ($27.78 × 31)  

Assembling cost             $5,674.20                $2,075.22

                                   ($12.81 × 419)                ($ 12.81 × 162

Total Overhead cost   $11,619.60                  $6,721.18