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The company has implemented an activity-based costing system for its manufacturing overhead costs with the activity cost pools and activity driver data below. Activity Activity

The company has implemented an activity-based costing system for its manufacturing overhead costs with the activity cost pools and activity driver data below.

Activity Activity Cost ($) Total Activity Drivers
Basic system Advanced system
Machine set up 100 000 200 setup 50 setup 150 setup
Material receiving 60 000 80 000 kilograms 30 000 kilograms 50 000 kilograms
Inspection 80 000 1600 inspections 700 inspections 900 inspections
Engineering 140 000 7 000 EH 3 000 EH 4 000 EH
Total Overhead 800 000
MH = Machine hours
EH = Engineering hours

Southern Cross plans to produce 1 000 units of each model of fax machine

Question:

  1. Determine, under activity-based costing, the total overhead to be assigned to each product line.

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