Question

Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to calculate product cost. Activity Cost Pools Estimated Total Cost Estimated Cost Driver Machining $ 320,000 12,500 machine hours Setup 69,000 350 batches Quality control 89,000 760 inspections Suppose the Luxury boat requires 4,450 machine hours, 125 inspections, and 65 batches. Using activity proportions, determine the amount of overhead assigned to the Luxury product line. (Round your intermediate calculations to the nearest whole percentage and your final answer to the nearest whole number.)

Answer 1

$141,373

Step-by-step explanation:

As provided the details of cost activity:

Rate per activity is as follows:

Machining = $320,000/12,500 hours = $25.60 per hour

Luxury boat = 4,450 hours = $25.60
`*` 4,450 = $113,920

Setup = $69,000/350 batches = $197.143 per batch

Luxury boat = $197.143
`*` 65 = $12,814.295

Quality control = $89,000/760 = $117.11

Luxury boat = $117.11
`*` 125 = $14,638.75

Total Luxury Boat Overheads = $113,920 + $12,814.295 + $14,638.75

= $141,373