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Recently, MAKS Corp. switched to activity-based costing (ABC) from the department allocation method, where the company allocated overhead costs at a rate of $70 per
Recently, MAKS Corp. switched to activity-based costing (ABC) from the department allocation method, where the company allocated overhead costs at a rate of $70 per machine hour. The company reported the following data for its Finishing Department: Activity Material handling Machine setups Utilities Quality control Cost Drivers Tons of material handled Number of production runs Machine hours Number of inspections Amount $ 90 3,600 30 400 During May, the company purchased and used $135,000 of direct materials at $25 per ton. There were 8 production runs using a total of 12,000 machine hours in May. The Finishing Department needed 12 inspections Actual overhead costs totaled $855,000 for the month. Using activity based costing, how much overhead costs were applied to the Work-in-Process Inventory during May? Multiple Choice O $879,600. $855,000 $840,000
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