Question

For its inspecting cost pool, Davidson, Inc. expected overhead cost of $300,000 and 4,000 inspections. The actual overhead cost for that cost pool was $360,000 for 5,000 inspections. The activity-based overhead rate used to assign the costs of the inspecting cost pool to products is A.$60 per inspection. B.$72 per inspection. C.$75 per inspection. D.$90 per inspection.

Answer 1

C. $75 per inspection

Step-by-step explanation:

The computation of the activity-based overhead rate used to assign the costs is shown below:

= Expected overhead cost ÷ expected inspections

= $300,000 ÷ 4,000 inspections

= $75 per inspection

hence the correct option is C. $75 per inspection

We simply applied the above formula so that the correct value could come

Hence, the same is to be considered