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.

Answer rating: 100% (QA)

To calculate the machine overhead cost applied to Prod... View the full answer