Portofino Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data concerning two products appear below: How much overhead cost would be assigned to Product KJ22 using the activity-based costing system?
A)$157.87
B)$91,722.47
C)$10,385.22
D)$5,485.50
E)$16,640.87

Question

Portofino Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:  Data concerning two products appear below:  How much overhead cost would be assigned to Product KJ22 using the activity-based costing system?
A)$157.87 
B)$91,722.47 
C)$10,385.22 
D)$5,485.50 
E)$16,640.87

Quizplus · Accepted Answer

Overhead cost assigned to Product KJ22 = (Activity rate for Activity 1 x Activity level for Product KJ22 for Activity 1) + (Activity rate for Activity 2 x Activity level for Product KJ22 for Activity 2) + (Activity rate for Activity 3 x Activity level for Product KJ22 for Activity 3)

= ($12.75 x 200) + ($10.25 x 2,000) + ($3.05 x 1,000)

= $2,550 + $20,500 + $3,050

= $26,100

Therefore, the correct answer is C) $10,385.22.

Portofino Corporation Uses the Following Activity Rates from Its Activity-Based