Question

Weirick, Inc., manufactures and sells two products: Product T8 and Product P4. 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 Overhead Cost Product T8 Product P4 Total Labor-related DLHs $ 117,100 4,800 2,400 7,200 Production orders orders 55,210 700 200 900 Order size MHs 863,520 2,900 3,600 6,500 $ 1,035,830 The total overhead applied to Product P4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) rev: 03_25_2018_QC_CS-119201

Answer 1

Answer:

Total Overhead cost  = $529,552

Explanation:

Product P4             Expected cost   Expected Activity   Activity Rate

Labor-related                117,100                7,200                    16.26

Production orders         55,210                 900                      61.34

Order size                      863,520             6,500                   132.85

The total overhead applied to Product P4 under activity-based costing will be derived by Total of various (Activity Rate * Activity incurred)

Product P4              Activity Rate  Activity Incurred Overhead assigned

Labor-related              16.26                  2,400                  39024

Production orders       61.34                   200                     12268

Order size                   132.85                 3,600                  478260

Total Overhead cost                                                          $529,552