A company identified the following partial list of activities, costs, and activi

Question

A company identified the following partial list of activities, costs, and activity drivers expected for the next year.

Activity. Expected Costs. Cost Driver.

Extrusion Costs $83,600 Number batches made

Handling Costs $8,800 Number of orders filled

Packaging Costs $40,500 Number of units made

Products Product A Product B

Production volume 750,000 units 600,000 units

Batches made 200 batches 750 batches

Orders filled 75 200

How much overhead in total will be assigned to the Product A line?

$42,500.

$132,900.

$90,400.

$66,000.

$66,450.

Explanation / Answer

Extrusion Costs= 83,600*200/950=17600 ( on the basis of Number batches made )
Handling Costs= 8,800*75/275=2400 ( on the basis of Number of orders filled )
Packaging Costs=40,500*750000/1350000=22500 ( on the basis of Number of units made )

total overhead cost=17600+2400+22500=$42500


How much overhead in total will be assigned to the Product A line?
$42,500.
$132,900.
$90,400.
$66,000.
$66,450.

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