Quantum Corporation has provided the following data from its activity-based costing system: $\begin{array}{lcrl}
\text { Activity Cost Pool }&&\text { Overhead Cost }&\text { Total Activity }\
\text { Assembly } & \$ & 1,114,920 & 57,000 \text { machine hours } \
\text { Processing orders } & \$ & 47,016 & 1,800 \text { orders } \
\text { Inspection } & \$ & 107,328 & 1,560 \text { inspection hours }
\end{array}$

The company makes 430 units of product R32E a year, requiring a total of 1,120 machine-hours, 40 orders, and 30 inspection-hours per year. The product's direct materials cost is $49.81 per unit and its direct labor cost is $12.34 per unit. The product sells for $129.90 per unit.
- According to the activity-based costing system, the total cost for producing the 340 units of the J71B product is:
A) $37,126.72
B) $15,504.00
C) $30,972.72
D) $17,957.92
E) $21,622.72

Question

Quantum Corporation has provided the following data from its activity-based costing system: $\begin{array}{lcrl}
\text { Activity Cost Pool }&&\text { Overhead Cost }&\text { Total Activity }\
\text { Assembly } & \$ & 1,114,920 & 57,000 \text { machine hours } \
\text { Processing orders } & \$ & 47,016 & 1,800 \text { orders } \
\text { Inspection } & \$ & 107,328 & 1,560 \text { inspection hours }
\end{array}$

The company makes 430 units of product R32E a year, requiring a total of 1,120 machine-hours, 40 orders, and 30 inspection-hours per year. The product's direct materials cost is $49.81 per unit and its direct labor cost is $12.34 per unit. The product sells for $129.90 per unit. 
- According to the activity-based costing system, the total cost for producing the 340 units of the J71B product is:
A) $37,126.72
B) $15,504.00
C) $30,972.72
D) $17,957.92
E) $21,622.72

Quizplus · Accepted Answer

The total cost for producing the 340 units of the J71B product is the sum of the direct materials cost, direct labor cost, and overhead cost. The direct materials cost is $49.81 per unit, the direct labor cost is $12.34 per unit, and the overhead cost is $1,114,920 / 57,000 machine hours * 1,120 machine hours + $47,016 / 1,800 orders * 40 orders + $107,328 / 1,560 inspection hours * 30 inspection hours = $21,622.72. Therefore, the total cost for producing the 340 units of the J71B product is $49.81 * 340 + $12.34 * 340 + $21,622.72 = $37,126.72.

Quantum Corporation Has Provided the Following Data from Its Activity-Based