Question: QUESTION 25 Peregrine Inc. uses activity based costing with two categories of overhead: maintenance and inspections. Overhead rates for the coming year are as follows:

QUESTION 25

  1. Peregrine Inc. uses activity based costing with two categories of overhead: maintenance and inspections. Overhead rates for the coming year are as follows:

    Activity

    		 Cost Driver Activity Overhead Rate
    Maintenance Machine Hours $30/MH
    Inspection Number of Inspections $750/inspection

    Use the following data to estimate the total product cost of the potential job:

    Direct materials

    		 $ 5,000
    Direct labor $ 18,000
    Machine-hours 200
    Number of inspections 5
    Direct labor-hours 600

$32,750

$33,600

$31,600

$34,450

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