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The Dawson Company manufactures small lamps and desk lamps. The following shows the activities per product and the total over
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Answer #1
Activity pool Activity base (i) Budgeted amount (ii) Cost per activity base (ii)/(i)
Setups 10,200 $87,720 $8.6 per setup
Inspections 24,400 $136,640 $5.6 per inspection
Assembly 71,400 $257,040 $3.6 per assembly

Overheads charged to Small lamps

Setups 3,400 x 8.6 = 29,240
Inspections 9,150 x 5.6 = 51,240
Assembly 40,800 x 3.6 = 146,880
Total overheads $227,360

Overhead per unit to be charged to Small lamps = Total overheads applied/Number of units

= 227,360/2,700

= $84.21

Correct option is (b)

Kindly comment if you need further assistance. Thanks

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