Ekmark Corporation uses the following activity rates from its activity-based cos

Question

Ekmark Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:

Assembling products.................. $6.56 per assembling hour
Processing customer orders......... $65.38 per customer order
Setting up batches...................... $82.84 per batch


Data for one of the company's products follow:

Product P59G
Number of Assembly Hours.............240
Number of Customer Orders...........48
Number of Batches.......................64


How much overhead cost would be assigned to Product P59G using the activity-based costing system?
A) $54,482.56
B) $5,301.76
C) $10,014.40
D) $154.78

Explanation / Answer

Thanks to Wikipedia "Overhead expenses are all costs on the income statement except for direct labor, direct materials & direct expenses" $6.56 * 240 = $1574.40 $65.38 * 48 = $3138.24 $82.84 * 64 = $5301.76 Add all up to get $10,014.40 The answer is C) $10,014.40 Hope this helped, best of luck.

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