The total overhead applied to Product B5 under activity-based costing is closest to:
A)$280,140
B)$365,924
C)$438,815
D)$329,120

Question

Quizplus · Accepted Answer

First, we need to calculate the overhead cost per unit of Product B5 using activity-based costing:

Activity 1 cost per unit: ($48,000/8,000) = $6 per unit 
Activity 2 cost per unit: (($200,000 x 60%)/20,000) = $6 per unit 
Activity 3 cost per unit: (($400,000 x 40%)/10,000) = $16 per unit

Total overhead cost per unit = $6 + $6 + $16 = $28 per unit

Next, we need to calculate the total overhead applied to Product B5:

Total Product B5 units produced = 12,460 
Total overhead applied = 12,460 x $28 = $349,680

However, the question is asking for the closest answer, so we look for the choice that is closest to $349,680. Choice B is the closest with a value of $365,924, making it the best choice. Computation of activity rates: 11ea7998_5ead_58d6_911b_6d9d1ebcffeb_TB2627_00_TB2627_00 Computation of the overhead cost under activity-based costing. 11ea7998_5ead_7fe7_911b_ddfa47f567e0_TB2627_00_TB2627_00 Reference: CH04-Ref15
Gesualdo, Inc., manufactures and sells two products: Product Z6 and Product F4.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: 11ea7998_5ead_7fe8_911b_052856330f46_TB2627_00_TB2627_00 The direct labor rate is $24.70 per DLH.The direct materials cost per unit for each product is given below: 11ea7998_5ead_a6f9_911b_ab3bde56a45b_TB2627_00_TB2627_00 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: 11ea7998_5ead_ce0a_911b_a1bb748fe120_TB2627_00_TB2627_00

The Total Overhead Applied to Product B5 Under Activity-Based Costing