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Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has...

Angara Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:

Activity Cost Pool (and Activity Measure) Total Cost
Machine related (machine-hours) $ 111,600
Batch setup (setups) $ 441,600
Order size (direct labor-hours) $ 91,700
Total Activity
Activity Cost Pools Product X Product Y Total
Machine related 1,000 5,000 6,000
Batch setup 2,500 3,500 6,000
Order size 6,000 1,000 7,000

The total amount of overhead cost allocated to Product X would be closest to: (Do not round your intermediate calculations.)

rev: 03_17_2018_QC_CS-119201

Garrison 16e Rechecks 2018-07-24

Business   Accounting   
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Answer #1
Activity pool Total cost (i) Product X (ii) Product Y Total (iii) (iv) Activity rate (i)/(iii) cost allocated to Product X (ii x iv)
Machine related 111,600 1,000 5,000 6,000 111,600/6,000 = $18.6 per machine hour 1,000 x 18.6 = 18,600
Batch setup 441,600 2,500 3,500 6,000 441,600/6,000 = $73.6 per setup 2,500 x 73.6 = 184,000
Order size 91,700 6,000 1,000 7,000 91,700/7,000 = $13.1 per order 6,000 x 13.1 = 78,600
Total cost $281,200

Total amount of overhead cost allocated to Product X = $281,200

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