costing is closest tO: A) $1.83 B) $1.98 C) $5.o0 D) $10.oo 8. Draus Products Co
ID: 2342408 • Letter: C
Question
costing is closest tO: A) $1.83 B) $1.98 C) $5.o0 D) $10.oo 8. Draus Products Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools: Actual Estimated OverheadActual Overhead Expected Activity 4,800 2,400 Cost Activity Cost Activity #1 | $ 59,798 4.830 Activity #2 | $ 58,476 2,370 Activity #3 $130,324 I 4,450 Activity #1 | $ 60,048 Activity #2 | $ 58,656 Activity #3 l $130.324 T -4,400 - The total amount of overhead applied during the year was closest to: A) $248,508 B) $248,988 C) $250,155 D) $251,334 -9. Using data from question 8, The total amount of the debits to the Manufacturing Overhead during the year was closest to: A) $248,508 B) $248,988 C) $251,110 D) $250,334 10. When there are batch-level or product-level costs, in comparison to a traditional co system. an activity-based costing system ordinarily will shift costs from:
Explanation / Answer
1. Total Amount of Applied OH
Total Amount of Applied OH = OH Estimated Cost * Actual Activity / Estimated Activity
Total Amount of Applied OH = 60048 * 4830 / 4800 + 58656 * 2370 / 2400 + 130324 * 4450 / 4400
Total Amount of Applied OH = $250155 (Option C)
2. Total Amount of Debits
Total Amount of Debits = Actual OH Cost
Total Amount of Debits = 59898 + 58476 + 130324 = $248508 (Option A)
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