Activity rates from Lippard Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products:
Activity Cost Pools Activity Rate
Setting up batches $46.61 per batch
Processing customer orders $31.62 per customer order
Assembling products $2.86 per assembly hour
Last year, Product H50E involved 9 customer orders, 666 assembly hours, and 77 batches. How much overhead cost would be assigned to Product H50E using the activity-based costing system?
$60,979.68
$3,588.97
$5,778.31
$81.09
The correct answer is as follows:
Overhead cost = 9*31.62+666*2.86+77*46.61
= 5778.31
Hence, the correct answer is option (C), 5778.31
Last year, Product H50E involved 9 customer orders, 666 assembly hours, and 77 batches. How much overhead cost would be assigned to Product H50E using the activity-based costing system?