The total amount of overhead cost allocated to Product X during the year would be closest to:

A) $1,573,800.
B) $1,580,000.
C) $1,628,000.
D) $1,209,450.

Question

The total amount of overhead cost allocated to Product X during the year would be closest to:A) $1,573,800.B) $1,580,000.C) $1,628,000.D) $1,209,450.

Fatma Salem · Accepted Answer

Final Answer : A, Explanation :  The correct answer is A. The total amount of overhead cost allocated to Product X during the year would be closest to $1,573,800. This is calculated by multiplying the actual activity for Product X by the activity rates. The activity rates are calculated by dividing the estimated overhead cost by the expected activity. The actual activity for Product X is 7,000 machine-hours, 22,000 setups, and 12,000 direct labor-hours. The activity rates are $20.80 per machine-hour, $54.50 per setup, and $19.10 per direct labor-hour. The total amount of overhead cost allocated to Product X is $1,573,800 ($20.80 x 7,000) + ($54.50 x 22,000) + ($19.10 x 12,000).

The total amount of overhead cost allocated to Product X during the year would be closest to:

A) $1,573,800.
B) $1,580,000.
C) $1,628,000.
D) $1,209,450.

Definitions

Learning Objectives

Learning Objectives

Related questions