Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below:

The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 200 direct labor-hours, 4 hours of product testing, and 2 sales calls.

Required:

Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?

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Activity Cost Pool Order size Activity Rate R16.85 per direct labor-hour Activity Measure Number of direct labor-hours Customer orders Number of customer orders R320.00 per customer order R89.00 per testing hour R1,090.00 per sales call Product te sting Number of testing hours Number of sales calls Selling