A company uses activity-based costing to determine the costs of its three products: A,B,and C.The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:
-How much overhead will be assigned to Product B using activity-based costing?
A)$56,500
B)$78,000
C)$62,500
D)$197,000
E)$70,000

Question

A company uses activity-based costing to determine the costs of its three products: A,B,and C.The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: 
-How much overhead will be assigned to Product B using activity-based costing?
A)$56,500 
B)$78,000 
C)$62,500 
D)$197,000 
E)$70,000

Quizplus · Accepted Answer

Overhead assigned to Product B = (Machine hours for Product B x Machine hour rate) + (Number of setups for Product B x Setup cost per setup)= (1,000 hours x $25 per hour) + (20 setups x $1,500 per setup)= $25,000 + $30,000= $55,000

A Company Uses Activity-Based Costing to Determine the Costs of Its