Figurski Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Machining, $38,500; Order Filling, $23,000; and Other, $15,500. Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below:
-What is the overhead cost assigned to Product I6 under activity-based costing?
A)$38,500
B)$25,025
C)$6,900
D)$31,925

Question

Figurski Corporation uses activity-based costing to assign overhead costs to products. Overhead costs have already been allocated to the company's three activity cost pools as follows: Machining, $38,500; Order Filling, $23,000; and Other, $15,500. Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: 
-What is the overhead cost assigned to Product I6 under activity-based costing?
A)$38,500 
B)$25,025 
C)$6,900 
D)$31,925

Quizplus · Accepted Answer

Total MHs = 3,500 MHs + 6,500 MHs = 10,000 MHs
Machining: $38,500 F1F1F1S1F1F1F10 10,000 MHs = $3.85 per MH
Total orders = 700 orders + 300 orders = 1,000 orders
Order Filling: $23,000 F1F1F1S1F1F1F10 1,000 orders = $23.00 per order
Overhead cost for Product I6:
 11eaa48f_7b95_ba77_9e4a_9b1706a6aa27_TB2485_00

Figurski Corporation Uses Activity-Based Costing to Assign Overhead Costs to Products