Glassey Corporation uses activity-based costing to assign overhead costs to products.Overhead costs have already been allocated to the company's three activity cost pools as follows: Processing, $20, 000;Supervising, $33, 500;and Other, $16, 500.Processing costs are assigned to products using machine-hours (MHs)and Supervising costs are assigned to products using the number of batches.The costs in the Other activity cost pool are not assigned to products.Activity data appear below: What is the overhead cost assigned to Product T3 under activity-based costing?
A)$26, 100
B)$19, 400
C)$35, 000
D)$6, 700

Question

Glassey Corporation uses activity-based costing to assign overhead costs to products.Overhead costs have already been allocated to the company's three activity cost pools as follows: Processing, $20, 000;Supervising, $33, 500;and Other, $16, 500.Processing costs are assigned to products using machine-hours (MHs)and Supervising costs are assigned to products using the number of batches.The costs in the Other activity cost pool are not assigned to products.Activity data appear below:  What is the overhead cost assigned to Product T3 under activity-based costing?
A)$26, 100 
B)$19, 400 
C)$35, 000 
D)$6, 700

Quizplus · Accepted Answer

Processing: $20, 000 ÷ 10, 000 MHs = $2.00 per MH
Supervising: $33, 500 ÷ 1, 000 batches = $33.50 per batch
Overhead cost for Product T3:
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Glassey Corporation Uses Activity-Based Costing to Assign Overhead Costs to Products.Overhead