Question

Hane Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Assembling products $ 8.90 per assembly hour Processing customer orders $ 31.23 per customer order Setting up batches $ 43.72 per batch Data for one of the company's products follow: Product U94W Number of assembly hours 389 Number of customer orders 53 Number of batches 61 How much overhead cost would be assigned to Product U94W using the activity-based costing system

Answer 1

Total allocated costs= $7,784.21

Step-by-step explanation:

To allocate overhead to Product U94W, we need to use the following formula:

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

Assembling products= 8.90*389= $3,462.1

Processing customer orders= 31.23*53= $1,655.19

Setting up batches= 43.72*61= $2,666.92

Total allocated costs= $7,784.21