a company uses the following activity rates from its activity based costing to a

Question

a company uses the following activity rates from its activity based costing to assign overhead costs to products,

activity cost pools                                          activity rate

setting up batches                                          $92.68 per batch

Processing customer orders                         $95.08 per customer order

assembling products                                     $3.41 assembly hour

lastyear product N79A required 28 batches, 6 customer orders and 712 assembly hours. How much total overhead cost would be assigned to Product N79A using the companys activity based costing system?

Explanation / Answer

$5,593.44 total overhead cost would be assigned to Product N79A using the companys activity based costing system Statement showing computations Activity cost pools Activity Rate Activity reqd by N79A Total Cost for N79A = Activity Rate *Activity Setting up batches                                 92.68                                      28.00                           2,595.04 Processing customer orders                                 95.08                                         6.00                               570.48 Assembling products                                     3.41                                    712.00                           2,427.92                           5,593.44

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