9. Jeanlouis, Inc., manufactures and sells two products: Product DO and Product
ID: 2563599 • Letter: 9
Question
9. Jeanlouis, Inc., manufactures and sells two products: Product DO and Product D5. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Labor-related Production orders orders General factory Overhead Cost Product DO Product D5 Total 3.3001 6.900 5001 800 4,200 8,500 3,600 300 4,300 DLHs $313,743 70,264 253.555 $637.562 MHs The total overhead applied to Product D5 under activity-based costing is closest to: A. $319,252 B. $125,286 C. $304,920 D. $273,240 E. $318,310Explanation / Answer
Allocated = Total Overhead cost / Total Expected Activity x Expected Activity of the particular product
Labour Related - 313743 / 6900 x 3300 = $150051
Production Orders - 70264 / 800 x 500 = $43915
General Factory - 253555 / 8500 x 4200 = $125286
Total overhead cost applied to the product D5 = $150051 + $43915 + $125286 = $319252
In activity based accounting/costing the overhead cost are applied to the products according to the activities used by them and to the extent used by them.
OH Cost Total Product D5 Allocated $313,743 6900 3300 $150,051 $70,264 800 500 $43,915 $253,555 8500 4200 $125,286Related Questions
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