John, Inc., manufactures and sells two prodocuts: Product D0 and Product D5. The

Question

John, Inc., manufactures and sells two prodocuts: Product D0 and Product D5. The company has an activity-based costing system with the following activity cost pools, acitivity measures, and expected activity:

The total overhead applied to Product D5 under activity-based costing is closest to:

A. $125,286

B. $304,920

C. $273,240

D. $319,252

Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product D0 Product D5 Toal Labord-related DLHs $313,743 3,600 3,300 = 6,900 Production Orders Orders 70,264 300 500 = 800 General Factory MHs 253,555 4,300 4,200 =8,500 $637,562

Explanation / Answer

Product D5

Labor related (313743*3300/6900) = $ 150051

Production orders (70264*500/800) = $ 43915

General Factory (253555*4200/8500) = $ 125286

Total cost = $ 319252

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