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sesenic [268]
3 years ago
8

A company calculated the predetermined overhead based on an estimated overhead of $70,000, and the activity for the cost driver

was estimated as 2,500 hours. If Product A utilized 1,350 hours and Product B utilized 1,100 hours, what was the amount of overhead assigned to the products
Business
1 answer:
Ivenika [448]3 years ago
5 0

Answer:

$68,600

Explanation:

Activity Based Overhead Rates = Estimated Overhead / Expected Use of Cost Drivers per Activity (Hours)

Activity Based Overhead Rates = $70,000 / 2,500

Activity Based Overhead Rates = $28

Overhead Assigned = Overhead Rate * Hours Utilized

Product A Overhead Assigned = $28 * 1,350 hours

Product A Overhead Assigned = $37,800

Product B Overhead Assigned = $28 * 1,100 hours

Product B Overhead Assigned = $30,800

Total Overhead Assigned = Product A Overhead Assigned + Product B Overhead Assigned

Total Overhead Assigned = $37,800 + $30,800

Total Overhead Assigned = $68,600

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