Brooke Corporation uses activity-based costing to determine product costs for ex

Question

Brooke Corporation uses activity-based costing to determine product costs for external financial reports. Activity rates computed at the beginning of the year are used to apply manufacturing overhead costs to products. The company has provided the following data concerning its activity-based costing system.

The data used to develop activity rates were:



The actual total manufacturing overhead cost incurred for the year was $3,064,400.


The total amount of overhead cost allocated to Product X during the year would be closest to?

Explanation / Answer

the given data is insufficient to answer this question.
It requires the budgeted overheads, budgeted activity driver and actual activity driver to find out the allocated overheads.
we may not have allocated overheads equal to the actual overheads of $3,064,400. But they may be near to the actual overheads of $3,064,400. We can find the difference between the allocated and actual overheads to find whether there is any over or under absorption.

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