Question

The following data regarding the activity-based costing system at the Company Co. is available: Activity Pool...

The following data regarding the activity-based costing system at the Company Co. is available:

Activity

Pool

Base

Budgeted

Activity

Budgeted

Cost

Machine set up

# of setups

2710

$24804

Orders

# of orders

991

$96484

Shipping

Hours of shipping time

2233

$41621


In addition, prior to adopting an activity based costing system, Company Co. applied overhead based on direct labour hours. The budgeted total labour hours for the year was 54645. If one job required 424 direct labour hours, 39 setups, 50 orders, and 24 hours of shipping time what is the difference between the overhead assigned using the traditional method and ABC?

Select one:

a. $1264

b. $3438

c. $4408

d. $5672
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