Question
Carothers Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead
Carothers Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools:
| Estimated Overhead Cost | Expected Activity | ||
| Activity 1 | $20,000 | 2,000 | |
| Activity 2 | $36,000 | 1,800 | |
| Activity 3 | $40,000 | 2,500 |
Actual activity for the current year was as follows:
- Activity 1 - 2,005
- Activity 2 - 1,815
- Activity 3 - 2,490
The amount of overhead applied for Activity 3 during the year was closest to:
| a. | $96,190 | |
| b. | $39,840 | |
| c. | $40,000 | |
| d. | $36,300 |
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Managerial Accounting A Focus on Ethical Decision Making
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
5th edition
978-0324663853
