Homework Answers
The amount of Overhead assigned to Oil using ABC is
B) $1,942,500
Working:
| a | b | a+b=c | d | d/c=e | f=e*a | g=e*b | ||
| Activity | Activity Base | Oil | Sludge | Total Activity | Activity Cost | Rate per activity | Oil | Sludge |
| Processing | Transactions | 300 | 500 | 800 | $ 1,500,000.00 | $ 1,875.00 | $ 562,500.00 | $ 937,500.00 |
| Packaging | Transactions | 120000 | 80000 | 200000 | $ 1,500,000.00 | $ 7.50 | $ 900,000.00 | $ 600,000.00 |
| Testing | Tests | 1600 | 400 | 2000 | $ 600,000.00 | $ 300.00 | $ 480,000.00 | $ 120,000.00 |
| Total | $ 3,600,000.00 | $ 1,942,500.00 | $1,657,500.00 |
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