Activity rates from Mcelderry Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products: Last year, Product Q06J involved 10 customer orders, 580 assembly hours, and 12 batches. How much overhead cost would be assigned to Product Q06J using the activity-based costing system?
A)$71.01
B)$219.12
C)$2,388.22
D)$42,748.02

Question

Activity rates from Mcelderry Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products:  Last year, Product Q06J involved 10 customer orders, 580 assembly hours, and 12 batches. How much overhead cost would be assigned to Product Q06J using the activity-based costing system?
A)$71.01 
B)$219.12 
C)$2,388.22 
D)$42,748.02

Quizplus · Accepted Answer

To calculate the overhead cost assigned to Product Q06J, we need to multiply the activity rates by the activity level for each activity.

For customer orders: $7.50 x 10 = $75
For assembly hours: $3.50 x 580 = $2,030
For batches: $164 x 12 = $1,968

Total overhead cost assigned to Product Q06J = $75 + $2,030 + $1,968 = $2,388.22

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