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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 per machine hour. The cost accountant for the Finishing Department has gathered the following data: Activity Material handling Machine setups Utilities Quality control Cost Drivers Tons of material handled Number of production runs Machine hours Number of inspections Amount $ 60 3,650 30 $ 400 During April, Mega purchased and used $135,000 of direct materials at $25 per ton. There were eight (8) production runs using a total of 10,000 machine hours in April. The manager of the Finishing Department needed 12 inspections. Actual overhead costs totaled $910,000 for the month. How much overhead costs were applied to the Work-in-Process Inventory during April using traditional costing
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