Nile Corp. has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:

The accounting records show the Mossman Job consumed the following resources:

Using the three cost pools to allocate overhead costs, what is the total amount of overhead costs to be allocated to the Mossman Job?
A) $442.00
B) $449.00
C) $10,071.67
D) $428.60

Question

Nile Corp. has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:

The accounting records show the Mossman Job consumed the following resources:

Using the three cost pools to allocate overhead costs, what is the total amount of overhead costs to be allocated to the Mossman Job?
A) $442.00 
B) $449.00 
C) $10,071.67 
D) $428.60

Quizplus · Accepted Answer

Supervision cost driver rate = 304,000 ÷ 760,000 dlh = $0.40 per dlh
Machine maintenance cost driver rate = $153,600 ÷ 960,000 mh = $0.16 per mh
Facility rent cost driver rate = $165,000 ÷ 110,000 sq ft = $1.50 per sq ft
Total amount of overhead costs to be allocated to the Mossman Job
= (260 × $0.40 per dlh) + (1,500 × $0.16 per mh) + (70 × $1.50 per sq ft) = $449.00

Nile Corp Has Identified Three Cost Pools to Allocate Overhead Costs