The Skagit Company manufactures Hooks and Nooks. The following shows the activities per product and total activity information: Calculate the total factory overhead to be charged to Nooks.
A) $300,000
B) $400,000
C) $488,000
D) $600,000

Question

The Skagit Company manufactures Hooks and Nooks. The following shows the activities per product and total activity information:   Calculate the total factory overhead to be charged to Nooks.
A) $300,000 
B) $400,000 
C) $488,000 
D) $600,000

Quizplus · Accepted Answer

To calculate the total factory overhead to be charged to Nooks, we need to use activity-based costing (ABC) method.
Overhead rate for Hooks = (90,000 + 60,000 + 30,000 + 80,000) / 100,000 = $2.60 per unit
Overhead rate for Nooks = (180,000 + 240,000 + 60,000 + 96,000) / 80,000 = $6.00 per unit
Total factory overhead to be charged to Nooks = 80,000 units x $6.00 per unit = $480,000
Therefore, the correct answer is C) $488,000.

The Skagit Company Manufactures Hooks and Nooks