4 Durban Metal Products, Ltd., of the Republic of South Africa makes specialty m

Question

4 Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below: Activity Cost Pool Order size Customer orders Product testing Selling points Activity Measure Activity Rate Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls $16.60 per direct labor-hour $ 357.00 per customer orde $79.00 per testing hour $1,495.00 per sales call eBook The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 190 direct labor-hours, 16 hours of product testing, and 5 sales calls. Hint Required: What is the total overhead cost assigned to the order for heavy-duty trailer axles? Print Cost Pool ABC Cost Order size Customer orders Product testing Selling Total overhead cost

Explanation / Answer

Calculate overhead cost assigned :

ABC Cost Order size (190*16.60) 3154 Customer orders 357 Product testing (79*16) 1264 Selling (1495*5) 7475 Total overhead cost 12250

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