Question
Border Corporation identified the following activities related to annual expected overhead costs at the beginning of 2018. Expected Expected Expected Expected Overhead Activity Cost Activity
Border Corporation identified the following activities related to annual expected overhead costs at the beginning of 2018.
Expected | Expected | Expected | Expected |
Overhead Activity | Cost | Activity Driver | Quantity |
Moving Materials | $ 16,000 | Number of moves | 500 |
Inspections | $ 22,400 | Number of inspection hours | 350 |
Ordering | $ 13,900 | Number of orders | 2,780 |
Maintenance | $ 161,200 | Machine hours | 6,200 |
The company's normal activity is 5,000 direct labor hours per year.
During January 2018, the company reported the following for two of its products:
| Product A | Product B |
Direct materials | $2,575 | $2,810 |
Direct labor | $2,100 | $3,300 |
Units completed | 40 | 50 |
Direct labor hours | 80 | 120 |
Number of material moves | 11 | 5 |
Number of inspection hours | 50 | 8 |
Number of orders | 50 | 20 |
Machine hours | 70 | 90 |
- If Border Corporation uses direct labor hours in a traditional costing system to assign overhead, what is the total cost of Product A?
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