Question

One of Hartman Company's activity cost pools is inspecting, with estimated overhead of $140,000. Hartman produces throw rugs (700 inspections) and area rugs (1,300 inspections). How much of the inspecting cost pool should be assigned to throw rugs? Group of answer choices $49,000. $70,000. $75,384. $140,000.

Answer 1

Answer:

$49,000

Explanation:

The number of inspection performed has a direct proportionality relationship with the allocated over heads. In other words, as the number of inspections performed increases, so does the overhead cost assigned to the production activity.

Total inspection  = 700 + 1300 = 2000

Total overhead = $140,000

The inspecting cost pool to be assigned to throw rugs

= 700/2000 × $140,000

= $49,000