Question
Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up
Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year:
| Activity | Expected Cost | Activity Driver | Activity Capacity | |||
| Setting up equipment | $120,000 | Number of setups | 300 | |||
| Ordering costs | 90,000 | Number of orders | 9,000 | |||
| Machine costs | 210,000 | Machine hours | 21,000 |
Plata produces two models of microwave ovens with the following activity demands:
| Model X | Model Y | |||
| Units completed | 8,000 | 4,000 | ||
| Number of setups | 200 | 100 | ||
| Number of orders | 3,000 | 6,000 | ||
| Machine hours | 12,000 | 9,000 |
The company's normal activity is 21,000 machine hours.
Calculate the total overhead cost that would be assigned to Model X using an activity-based costing system:
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Performance Auditing A Measurement Approach
Authors: Ronell B. Raaum, Stephen L. Morgan
4th Edition
0894134647, 978-0894134647
