Question

TB MC Qu. 4-59 Soehl, Inc., manufactures and sells ... Soehl, Inc., manufactures and sells two products: Product T4 and Product F9. The company has an activity-based costing systen with the following activity cost pools, activity measures, and expected activity: Expected Activity Estimated Activity Overhead Activity Cost Pools Measures Cost Labor-related DLHS $326,650 Product testing tests 68,572 Order size MHS 79,690 $ 474,912 Product T4 Product F9 4,500 4,900 600 800 3,200 3,300 Total 9,400 1,400 6,500 The total overhead applied to Product T4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Ans.	*For the computation of overhead cost assigned, we need to find out the activity rates of each activity.
	Activity cost pool	Estimated overhead (a)	Total activity (b)	Activity rate (a/b)
	Labor related	$326,650	9400	$34.75	Per direct labor hour
	Product testing	$68,572	1400	$48.98	Per test
	Order size	$79,690	6500	$12.26	Per machine hour
	*Now we can calculate the overhead cost assigned to Product T4 :
	Activity cost pool	Activity rate (a)	Activity of Product T4 (b)	Total overhead assigned (a*b)
	Labor related	$34.75	4500	$156,375
	Product testing	$48.98	600	$29,388
	Order size	$12.26	3200	$39,232
	Total Overhead Cost Assigned			$224,995
	*So the total overhead applied to Product T4 is closest to $224,995.