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Exercise 17-11 Activity-based costing and overhead cost allocation LO P3 The following is taken from Ronda Co.'s internal records of its factory with two production
Exercise 17-11 Activity-based costing and overhead cost allocation LO P3
The following is taken from Ronda Co.'s internal records of its factory with two production departments. The cost driver for indirect labor and supplies is direct labor costs, and the cost driver for the remaining overhead items is number of hours of machine use.
Direct Labor | Machine Use Hours | |||||||
Department 1 | $ | 18,800 | 2,000 | |||||
Department 2 | 13,200 | 1,200 | ||||||
Totals | $ | 32,000 | 3,200 | |||||
Factory overhead costs | ||||||||
Rent and utilities | $ | 12,200 | ||||||
Indirect labor | 5,400 | |||||||
General office expense | 4,000 | |||||||
DepreciationEquipment | 3,000 | |||||||
Supplies | 2,600 | |||||||
Total factory overhead | $ | 27,200 | ||||||
Compute the total amount of overhead cost allocated to Department 1 using activity-based costing. (Round activity rate answers to 2 decimal places.)
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