Question

Rocoe Company produces a variety of garden tools in a highly automated manufacturing facility. The costs and cost drivers associated with four activity cost pools are given below: Activities: Unit Level Batch Level Product Level Facility Level Total Cost $35,960 $13,052 $3,988 $45,600 Total Cost Driver Volume 5,800 labor hours 260 set ups % of use 38,000 units Production of 12,000 units of a hand-held tiller required 480 labor hours, 27 setups, and consumed 40% of the product sustaining activities. Assuming the company uses activity-based costing, how much total overhead will be allocated to this tool

Answer 1

Answer:

Explanation:

Overhead allocation:

Unit level = $35,960/5800 * 480 = 2,976

Batch level = 13,052/260 * 27 = 1355.4

Product level = 3,988*40% = 1595.2

Facility level = 45,600/38,000 * 12,000 = 14,400

Total overhead allocated 20,326.6