The following is taken from Ames Company's internal records of its factory with two operating departments.The cost driver for indirect labor is direct labor costs,and the cost driver for the remaining items is number of hours of machine use.Compute the total amount of overhead allocated to Dept.1 using activity-based costing.
A)$18,720.
B)$12,930.
C)$13,400.
D)$19,190.
E)$19,440.

Question

The following is taken from Ames Company's internal records of its factory with two operating departments.The cost driver for indirect labor is direct labor costs,and the cost driver for the remaining items is number of hours of machine use.Compute the total amount of overhead allocated to Dept.1 using activity-based costing. 
A)$18,720. 
B)$12,930. 
C)$13,400. 
D)$19,190. 
E)$19,440.

Quizplus · Accepted Answer

Indirect Labor: $11,220/$37,400 = 30% * $21,800 = $6,540
Other overhead; ($12,900 + $8,000)/3,800 = $5.50 * 2,300 = $12,650; $6,540 + $12,650 = $19,190

The Following Is Taken from Ames Company's Internal Records of Its