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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 | $ | 150,000 | Number of setups | 750 | ||
Ordering | 75,000 | Number of orders | 3,750 | |||
Maintenance | 187,500 | Machine hours | 18,750 | |||
Power | 37,500 | Kilowatt hours | 37,500 | |||
Total direct labor hours budgeted = 7,500 hours.
The following data applies to Product X, one of the products completed during the year.
Direct materials | $ | 3,750 |
Direct labor | $ | 4,500 |
Units completed | 375 | |
Direct labor hours | 150 | |
Number of setups | 15 | |
Number of orders | 30 | |
Machine hours | 150 | |
Kilowatt hours | 375 | |
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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