Hane Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data for one of the company's products follow:
How much overhead cost would be assigned to Product U94W using the activity-based costing system?
A) $42,176.55
B) $83.85
C) $7,784.21
D) $2,666.92

Question

Hane Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:  Data for one of the company's products follow:
 How much overhead cost would be assigned to Product U94W using the activity-based costing system?
A) $42,176.55 
B) $83.85 
C) $7,784.21 
D) $2,666.92

Quizplus · Accepted Answer

To calculate the overhead cost assigned to Product U94W, we need to multiply the activity rate of each activity by the corresponding amount of activity used by U94W, then add up the results. 
Activity 1: $0.35 x 34,500 = $12,075
Activity 2: $2.25 x 1,500 = $3,375 
Activity 3: $0.25 x 30,000 = $7,500 
Activity 4: $13 x 45 = $585 
Total overhead cost assigned to U94W = $23,535 
Therefore Choice C is the correct answer.

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