Angara Corporation uses activity-based costing to determine product costs for ex
ID: 2449018 • Letter: A
Question
Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
13,000
Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to:
$421,500
$897,500
$476,000
$611,100
Please show steps
Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:
Activities(and Activity Measures) Estimated
Overhead
Cost Machine related (machine-hours) $362,600 Batch setup (setups) $421,500 General factory (direct labour-hours) $308,100 Expected Activity Activities Product X Product Y Total Machine related 6,000 8,000 14,000 Batch setup 12,000 3,000 15,000 General factory 5,000 8,000
13,000
Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to:
$421,500
$897,500
$476,000
$611,100
Please show steps
Explanation / Answer
Machine related (machine- hours)
Total 611100
Activites Estimated Overhead Cost (A) Total (B) Per unit cost C = (A/B) Product X Cx Product xMachine related (machine- hours)
$362,600 14,000 25.9 6000 155400 Batch setup (setups) $421,500 15,000 28.1 12000 337200 General factory (direct labour-hours) $308,100 13,000 23.7 5000 118500