Question

Soehl, Inc., manufactures and sells two products: Product T4 and Product F9. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:

Expected activity
Activity Cost pools Activity Measures Estimated overhead cost Product T4 Product F9 Total
Labour related DLHs $326,650 4500 4900 9400
Product training tests 68,572 600 800 1400
Order size MHs 79,690 32,00 33,00 65,00

The total overhead applied to Product T4 under activity-based costing is closest to:________

Answer 1

Soehl, Inc.

The total overhead applied to Product T4 under activity-based costing is closest to:________

$224,995

Step-by-step explanation:

a) Data and Calculations:

Expected activity

Activity Cost pools Activity Estimated Product T4 Product F9 Total

Measures Overhead

Labour related DLHs $326,650 4500 4900 9400

Product training tests 68,572 600 800 1400

Order size MHs 79,690 32,00 33,00 65,00

Total overhead costs = $474,912

Activity rates:

Total Product T4 Product T9 Total

Labour related $34.75 $156,375 $170,275 $324,650

Product training costs $48.98 29,388 39,184 68,572

Ordering costs $12.26 39,232 40,458 79,690

Total overhead costs $224,995 $249,917 $474,912