Question
Rossi Manufacturing has decided to use specific cost pools to allocate its overhead costs. Rossi has identified the following information for the current year: Estimated
Rossi Manufacturing has decided to use specific cost pools to allocate its overhead costs. Rossi has identified the following information for the current year:
Estimated
Estimated Allocation
Overhead Pool AllocationBaseCost Base
Pool 1 - Storage Number of parts $150,000 600,000
Pool 2 - Design Number of production runs $100,000 50
Pool 3 - Production Number of machine hours $250,000 40,000
Pool 4 - Quality Number of components tested $ 75,000 100,000
Pool 5 - Security Number of direct labor hours $180,000 15,000
Using the information provided, if Rossi uses 45,000 parts this month, the amount of overhead applied for storage is:
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