The Mega Construction Company recently switched to activity-based costing (ABC) from the department allocation method. The department method allocated overhead costs at a rate of $50 per machine hour. The cost accountant for the Finishing Department has gathered the following data:

Activity	Cost Drivers	Amount
Material handling	Tons of material handled	$	70
Machine setups	Number of production runs		3,600
Utilities	Machine hours		20
Quality control	Number of inspections	$	550

During April, Mega purchased and used $105,000 of direct materials at $15 per ton. There were eight (8) production runs using a total of 10,000 machine hours in April. The manager of the Finishing Department needed 12 inspections. Actual overhead costs totaled $825,000 for the month.

How much overhead costs were applied to the Work-in-Process Inventory during April using activity-based costing?

A) $850,400

B) $500,000

C) $725,400

D) $825,000

Answer rating: 100% (QA)

c 725400 Material Overhead 105000 ton 90 ton 49000... View the full answer