Activity rates from Hample Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products:
Last year, Product J27W involved 30 customer orders, 152 assembly hours, and 54 batches. How much overhead cost would be assigned to Product J27W using the activity-based costing system?
A) $24,702.12
B) $5,419.38
C) $4,634.28
D) $104.67

Question

Activity rates from Hample Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products: 
Last year, Product J27W involved 30 customer orders, 152 assembly hours, and 54 batches. How much overhead cost would be assigned to Product J27W using the activity-based costing system?
A) $24,702.12 
B) $5,419.38 
C) $4,634.28 
D) $104.67

Quizplus · Accepted Answer

Using the activity rates given in the table, we can calculate the overhead cost assigned to Product J27W as follows:
Customer order activity cost = 30 x $12.50 = $375
Assembly activity cost = 152 x $50 = $7,600
Batch activity cost = 54 x $14 = $756
Total overhead cost assigned = $375 + $7,600 + $756 = $8,731
Therefore, the correct answer is B, $5,419.38.

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