Question
1.A running shoe manufacturer produces three types of shoes: traditional, minimalist, and spikes. The company uses the following information to determine activity rates for each
1.A running shoe manufacturer produces three types of shoes: traditional, minimalist, and spikes.
The company uses the following information to determine activity rates for each pool:
Cost PoolCostsTotal Activity
Shoe Production$250,00020,000 pairs of shoes
Shoe batches$10,000500 batches
Shoe design$5,000100 parts
Total$265,000
Data concerning the three shoe products appear below:
Cost Driver # of pairs of shoes # of batches # of parts
Traditional 10,000 150 20
Minimalist 7,500 250 30
Spikes 2,500 100 50
What is the total amount of overhead applied to spikes shoes?
a.$265,000
b.$100,250
c.$35,750
d.$31,250
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