Activity rates from Hilliard Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products: $\begin{array}{llr}
\text {Activity Cost Pools}&\text {Activity Rate}\
\text { Processing customer orders } & \$ 92.86 \text { per customer order } \
\text { Assembling products } & \$ 1.78 \text { per assembly hour } \
\text { Setting up batches } & \$ 52.09 \text { per batch }
\end{array}$

Last year, Product XL91 involved 2 customer orders, 434 assembly hours, and 20 batches. How much overhead cost would be assigned to Product XL91 using the activity-based costing system?
A) $1,041.80
B) $772.52
C) $2,000.04
D) $66,908.88
E) $146.73

Question

Activity rates from Hilliard Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products: $\begin{array}{llr}
\text {Activity Cost Pools}&\text {Activity Rate}\
\text { Processing customer orders } & \$ 92.86 \text { per customer order } \
\text { Assembling products } & \$ 1.78 \text { per assembly hour } \
\text { Setting up batches } & \$ 52.09 \text { per batch }
\end{array}$

Last year, Product XL91 involved 2 customer orders, 434 assembly hours, and 20 batches. How much overhead cost would be assigned to Product XL91 using the activity-based costing system?
A) $1,041.80
B) $772.52
C) $2,000.04
D) $66,908.88
E) $146.73

Quizplus · Accepted Answer

The overhead cost for Product XL91 is calculated by multiplying the activity rates by the respective activity quantities: (2 orders * $92.86) + (434 hours * $1.78) + (20 batches * $52.09) = $185.72 + $772.52 + $1,041.80 = $2,000.04.

Activity Rates from Hilliard Corporation's Activity-Based Costing System Are Listed