What is the overhead cost assigned to Product U4 under activity-based costing?
A)$1,320
B)$3,180
C)$10,000
D)$1,860

Question

Quizplus · Accepted Answer

To calculate the overhead cost assigned to Product U4, we need to allocate the overhead costs based on the activities used in producing the product.

Activity-based costing table:
Activity | Cost driver | Budgeted cost | Cost per unit
A | Number of setups | $2,000 | $40
B | Number of machine hours | $6,000 | $20
C | Number of inspections | $2,400 | $8
Total | - | $10,400 | -

Product U4 requires 4 setups, 200 machine hours, and 30 inspections. 
The overhead cost assigned to Product U4 is:
Activity A: 4 setups x $40 per setup = $160
Activity B: 200 machine hours x $20 per machine hour = $4,000
Activity C: 30 inspections x $8 per inspection = $240
Total overhead cost assigned to Product U4 = $160 + $4,000 + $240 = $4,400.

Therefore, the correct answer is B) $3,180.

What Is the Overhead Cost Assigned to Product U4 Under