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Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year: Cost Pools Budgeted Cost Cost Driver Cost Driver Level
Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year:
Cost Pools | Budgeted Cost | Cost Driver | Cost Driver Level | |||
Setup | $ | 160,000 | Number of setups | 800 | ||
Ordering | 80,000 | Number of orders | 4,000 | |||
Maintenance | 200,000 | Machine hours | 20,000 | |||
Power | 40,000 | Kilowatt hours | 40,000 |
Total direct labor hours budgeted = 8,000 hours.
The following data applies to Product X, one of the products completed during the year.
Direct materials | $ | 4,000 |
Direct labor | $ | 4,800 |
Units completed | 400 | |
Direct labor hours | 160 | |
Number of setups | 16 | |
Number of orders | 32 | |
Machine hours | 200 | |
Kilowatt hours | 400 |
If the activity-based cost drivers are used to allocate overhead cost, the total overhead cost of Product X will be:
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