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The Mega Construction Company recently switched to activity-based costing (ABC) from the department allocation method. The department method allocated overhead costs at a rate of
The Mega Construction Company recently switched to activity-based costing (ABC) from the department allocation method. The department method allocated overhead costs at a rate of $40 por machine hour. The cost accountar or t h ing Department has gathered the following data: Cost Drivers Tons of material handled Number of production runs Machine hours Number of inspections Amount $ 60 3,650 Material handling Machine setups utilities Quality control 100 During April, Mega purchased and used $135,000 of direct materials at $25 porton. There were 8 production rune using a total of 10,000 machine hours in April the manager of the finishing Department needed 12 incpection Actual overhead costs totaled $910,000 for the month How much overhead costs were applied to the World In-Process Inventory during April using traditional costing urte Choice 0 5910.000 0 650,000 0 5968.000 0 $400.000
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