The following overhead cost information is available for Henderson Inc.for 2006:
$\begin{array}{llc}
\text { Activity } & \text { Allocation Base } & \text { Overhead Cost } \
\hline \text { Purchasing } & \text { Number of purchase orders } & \$ 40000 \
\text { Receiving } & \text { Number of shipments received } & 25000 \
\text { Machine setups } & \text { Number of setups } & 30000 \
\text { Ouality control } & \text { Number of inspections } & 20000
\end{array}$
During the year,2000 purchase orders were issued;800 shipments were received;3000 machine setups were performed;and 2500 inspections were conducted.
If Job #101 required 3 purchase orders,4 shipments,4 machine setups,and 2 inspections to complete,how much overhead should be assigned to Job #101?
A) $241.00
B) $ 69.25
C) $180.18
D) $ 13.86

Question

Quizplus · Accepted Answer

Overhead cost assigned to Job #101 = (3 purchase orders x $40000/2000 purchase orders) + (4 shipments x $25000/800 shipments) + (4 machine setups x $30000/3000 machine setups) + (2 inspections x $20000/2500 inspections) = $241.00

The Following Overhead Cost Information Is Available for Henderson Inc