111k views
10 votes
Longview Manufacturing Company manufactures two products (I and II). The overhead costs ($60,500) have been divided into three cost pools that use the following activity drivers:

Number of Labor
Product Number of Orders Transactions Labor Hours
I 15 50 500
II 10 150 2,000
Cost per pool $12,500 $8,000 $40,000
If the number of labor hours is used to assign labor costs from the cost pool, determine the amount of overhead cost to be assigned to Product I.
a. $8,000.
b. $58,000.
c. $9,600.
d. $32,000.

1 Answer

3 votes

Answer:

a. $8,000.

Step-by-step explanation:

The computation of the amount of overhead cost assigned to the product I is shown below:

= $40,000 ÷ 2,500 × $500

= $8,000

Hence, the amount of overhead cost assigned to the product I is $8,000

Therefore the correct option is a.

User Artur Grigio
by
8.4k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories