21)

The Mega Construction Company recently switched to activity-based costing (ABC) from the department allocation method. The department method allocated overhead costs at a rate of $60 per machine hour. The cost accountant for the Finishing Department has gathered the following data:

Activity Cost Drivers Rate

Material handling Tons of material handled $80

Machine setups Number of production runs 3,750

Utilities Machine hours 25

Quality control Number of inspections $500

During April, Mega purchased and used $100,000 of direct materials at $20 per ton. There were 8 production runs using a total of 12,000 machine hours in April. The manager of the Finishing Department needed 12 inspections. Actual overhead costs totaled $820,000 for the month.

How much overhead costs were applied to the Work-in-Process Inventory during April using activity-based costing?