Question
ABC Company uses an ABC overhead costing system. It calculated the following predetermined overhead rates at the end of the year. It calculated the application
ABC Company uses an ABC overhead costing system. It calculated the following predetermined overhead rates at the end of the year. It calculated the application rates for the following three overhead pools:
Cost Pools Predetermined Application Rate
Machine Cost Pool $2.50 Per Machine Hour
Inspection Cost Pool $40.00 Per Inspection Hour
Engineers Cost Pool $50.00 Per Engineering Hour
Next to the application rate is the activity that drives the cost in each pool.
In January, Product A consumed the following activity:
Actual Results in January Product A
Machine Hours 5,000
Inspection Hours 100
EngineersHours 50
how muchInspection Overhead Costwill be applied to Product A?
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