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XYZ Ltd. uses activity-based costing (ABC) to allocate overhead costs. The company identified three cost pools: machine-related costs, setup costs, and inspection costs. If the
XYZ Ltd. uses activity-based costing (ABC) to allocate overhead costs. The company identified three cost pools: machine-related costs, setup costs, and inspection costs. If the total overhead costs for the year were $420,000, and the activity drivers and rates were as follows: 28,000 machine hours at $16 per hour, 800 setups at $1,200 per setup, and 3,500 inspections at $170 per inspection, calculate the overhead cost allocated to a product requiring 4,000 machine hours, 35 setups, and 300 inspections.
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