Question

Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year:

Activity Expected Cost Activity Driver Activity Capacity
Setting up equipment $120,000 Number of setups 300
Ordering costs 90,000 Number of orders 9,000
Machine costs 210,000 Machine hours
21,000

Plata produces two models of microwave ovens with the following activity demands:

Model X Model Y
Units completed 8,000 4,000
Number of setups 200 100
Number of orders 3,000 6,000
Machine hours 12,000 9,000
The company's normal activity is 21,000 machine hours.

Calculate the total overhead cost that would be assigned to Model X using an activity-based costing system ______________

Answer 1

GU

Model X Model Y

Units completed 8,000 4,000

Number of setups 200 100

Number of orders 3,000 6,000

Machine hours 12,000 9,000

4,000

Number of setups 200 100

Number of orders 3,000 6,000

Machine hours 12,000 9,000

The company's normal activity is 21,000 machine hours.

Calculate the total overhead cost that would