ABC Company uses an ABC overhead costing system. It calculated the following predetermined overhead rates at the
Question:
ABC Company uses an ABC overhead costing system. It calculated the following predetermined overhead rates at the end of the year. It calculated the application rates for the following three overhead pools:
Cost Pools Predetermined Application Rate
Machine Cost Pool $2.50 Per Machine Hour
Inspection Cost Pool $40.00 Per Inspection Hour
Engineers Cost Pool $50.00 Per Engineering Hour
Next to the application rate is the activity that drives the cost in each pool.
In January, Product A consumed the following activity:
Actual Results in January Product A
Machine Hours 5,000
Inspection Hours 100
Engineers Hours 50
Calculate the amount of machine overhead cost that will be applied to Product A in January.
Accounting Principles
ISBN: 978-1118875056
12th edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso