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sesenic [268]
3 years ago
7

Duce, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machi

ne hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $125 per machine hour, and the activity rate for Inspection is $500 per batch. The activity drivers are used as follows:
Product A Product X Total
Machine hours 1,900 3,900 5,800
Number of batches 45 22 67

What is the amount of Machining cost assigned to Product X?

a. $780,000
b. $22,500
c. $380,000
d. $950,000
Business
1 answer:
babunello [35]3 years ago
8 0

Answer:

Machinning= $487,500

Explanation:

<u>Giving the following information: </u>

The activity rate for Machining is $125 per machine hour.

Product A Product X Total

Machine hours 1,900 3,900 5,800

<u>To assign costs to Product X, we need to use the following formula:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Machinning= 125*3,900

Machinning= $487,500

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