41. Aunt Lucy's CandiesAunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $400,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

30%

Processing

Number of units

50%

Sales

Number of sales orders

20%

 

 

 

The number of activities for standard and premium candies is as follows: 

 

Standard

 

Premium

Number of purchase orders

6,000

 

4,000

Number of units

400,000

 

100,000

Number of sales orders

2,000

 

3,000

 

 

 

 

Refer to the Aunt Lucy's Candies information above. What is the overhead rate for the purchasing activity? A. $12.00 per purchase orderB. $18.28 per purchase orderC. $40.63 per purchase orderD. $36.56 per purchase order

 

42. Aunt Lucy's CandiesAunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $400,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

30%

Processing

Number of units

50%

Sales

Number of sales orders

20%

 

 

 

The number of activities for standard and premium candies is as follows: 

 

Standard

 

Premium

Number of purchase orders

6,000

 

4,000

Number of units

400,000

 

100,000

Number of sales orders

2,000

 

3,000

 

 

 

 

Refer to the Aunt Lucy's Candies information above. What is the overhead rate for the sales activity? A. $16.00 per sales orderB. $102.63 per sales orderC. $10.26 per sales orderD. $52.23 per sales order

 

43. Aunt Lucy's CandiesAunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $400,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

30%

Processing

Number of units

50%

Sales

Number of sales orders

20%

 

 

 

The number of activities for standard and premium candies is as follows: 

 

Standard

 

Premium

Number of purchase orders

6,000

 

4,000

Number of units

400,000

 

100,000

Number of sales orders

2,000

 

3,000

 

 

 

 

Refer to the Aunt Lucy's Candies information above. If a single sales order for premium candies requires 2 purchase orders for a total of 500 pieces (units), how much overhead should be assigned to that order? A. $201.08B. $204.93C. $262.56D. $240.00

 

44. Compton CorporationThe following overhead cost information is available for Compton Corporation for 2011: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$100,000

Receiving

Number of shipments received

    60,000

Machine setups

Number of setups

  150,000

Quality control

Number of inspections

    50,000

 

 

 

During the year, 5,000 purchase orders were issued; 20,000 shipments were received; 3,000 machine setups were performed; and 4,000 inspections were conducted. Refer to the Compton Corporation information above. What is the overhead rate for the purchasing activity? A. $0.05 per purchase orderB. $20.00 per purchase orderC. $72.00 per purchase orderD. $3.13 per purchase order

 

45. Compton CorporationThe following overhead cost information is available for Compton Corporation for 2011: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$100,000

Receiving

Number of shipments received

    60,000

Machine setups

Number of setups

  150,000

Quality control

Number of inspections

    50,000

 

 

 

During the year, 5,000 purchase orders were issued; 20,000 shipments were received; 3,000 machine setups were performed; and 4,000 inspections were conducted. Refer to the Compton Corporation information above. What is the overhead rate for the receiving activity? A. $1.88 per shipment receivedB. $6.00 per shipment receivedC. $3.00 per shipment receivedD. $0.33 per shipment received

 

46. Compton CorporationThe following overhead cost information is available for Compton Corporation for 2011: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$100,000

Receiving

Number of shipments received

    60,000

Machine setups

Number of setups

  150,000

Quality control

Number of inspections

    50,000

 

 

 

During the year, 5,000 purchase orders were issued; 20,000 shipments were received; 3,000 machine setups were performed; and 4,000 inspections were conducted. Refer to the Compton Corporation information above. If Job #229 required 5 purchase orders, 10 shipments, 8 machine setups, and 4 inspections to fill, how much overhead should be assigned to Job #229? A. $    4.06B. $303.75C. $580.00D. $  85.50

 

47. The following overhead cost information is available for Henderson Inc. for 2008: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$80,000

Receiving

Number of shipments received

  60,000

Machine setups

Number of setups

  45,000

Quality control

Number of inspections

  30,000

 

 

 

During the year, 4,000 purchase orders were issued; 2,400 shipments were received; 4,500 machine setups were performed; and 2,500 inspections were conducted.If Job #101 required 2 purchase orders, 6 shipments, 3 machine setups, and 5 inspections to complete, how much overhead should be assigned to Job #101? A. $280.00B. $60.00C. $150.00D. $40.00

 

48. Wake ConstructionWake Construction manufactures and installs standard and custom-made cabinetry for residential homes. Last year, the company incurred $200,000 in overhead costs. After implementing activity-based costing (ABC), the company's accountant identified the following related information: 

 

 

Proportion

Activity

Allocation Base

of Overhead Cost

Material delivery and handling

Number of deliveries

30%

Inspections

Number of inspections

25%

Supervision

Hours of supervisor time

20%

Purchasing

Number of purchase orders

25%

 

 

 

The number of activities for standard and custom-made cabinets is as follows: 

 

Standard

 

Custom-made

Number of deliveries

200

 

100

Number of inspections

600

 

400

Hours of supervisor time

1,800

 

2,200

Number of purchase orders

1,000

 

1,000

 

 

 

 

During the past year, Wake accepted a customer order for a set of custom-made cabinets that would require the following: 

Direct labor cost (25 hours at $15 per hour)

$   375

Direct materials (wood) (900 ft at $3.00 per foot)

$2,700

Number of deliveries

3

Number of inspections

5

Hours of supervisor time

5

Number of purchase orders

3

 

 

Refer to the Wake Construction information above. How much overhead should be applied to the above customer order? A. $4,050B. $285C. $3,360D. $975

 

49. Wake ConstructionWake Construction manufactures and installs standard and custom-made cabinetry for residential homes. Last year, the company incurred $200,000 in overhead costs. After implementing activity-based costing (ABC), the company's accountant identified the following related information: 

 

 

Proportion

Activity

Allocation Base

of Overhead Cost

Material delivery and handling

Number of deliveries

30%

Inspections

Number of inspections

25%

Supervision

Hours of supervisor time

20%

Purchasing

Number of purchase orders

25%

 

 

 

The number of activities for standard and custom-made cabinets is as follows: 

 

Standard

 

Custom-made

Number of deliveries

200

 

100

Number of inspections

600

 

400

Hours of supervisor time

1,800

 

2,200

Number of purchase orders

1,000

 

1,000

 

 

 

 

During the past year, Wake accepted a customer order for a set of custom-made cabinets that would require the following: 

Direct labor cost (25 hours at $15 per hour)

$   375

Direct materials (wood) (900 ft at $3.00 per foot)

$2,700

Number of deliveries

3

Number of inspections

5

Hours of supervisor time

5

Number of purchase orders

3

 

 

Refer to the Wake Construction information above. What is the total product (manufacturing) cost for the above customer order? A. $4,050B. $285C. $3,360D. $975

 

50. Johnson ManufacturingJohnson Manufacturing anticipates incurring $850,000 in overhead costs this year. After implementing activity-based costing (ABC), the company's controller identified the following related information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

20%

Machine setups

Number of setups

15%

Production

Number of machine hours

65%

 

 

 

The number of activities expected is as follows: 

Total number of purchase orders

4,800

Total number of setups

2,400

Total number of machine hours

12,000

 

 

Refer to the Johnson Manufacturing information above. How much total overhead will be allocated to the production activity? A. $170,000B. $552,500C. $30,000D. $127,500

 

 

 

 

 

41. Aunt Lucy's CandiesAunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $400,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

30%

Processing

Number of units

50%

Sales

Number of sales orders

20%

 

 

 

The number of activities for standard and premium candies is as follows: 

 

Standard

 

Premium

Number of purchase orders

6,000

 

4,000

Number of units

400,000

 

100,000

Number of sales orders

2,000

 

3,000

 

 

 

 

Refer to the Aunt Lucy's Candies information above. What is the overhead rate for the purchasing activity? A. $12.00 per purchase orderB. $18.28 per purchase orderC. $40.63 per purchase orderD. $36.56 per purchase order

 

42. Aunt Lucy's CandiesAunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $400,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

30%

Processing

Number of units

50%

Sales

Number of sales orders

20%

 

 

 

The number of activities for standard and premium candies is as follows: 

 

Standard

 

Premium

Number of purchase orders

6,000

 

4,000

Number of units

400,000

 

100,000

Number of sales orders

2,000

 

3,000

 

 

 

 

Refer to the Aunt Lucy's Candies information above. What is the overhead rate for the sales activity? A. $16.00 per sales orderB. $102.63 per sales orderC. $10.26 per sales orderD. $52.23 per sales order

 

43. Aunt Lucy's CandiesAunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $400,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

30%

Processing

Number of units

50%

Sales

Number of sales orders

20%

 

 

 

The number of activities for standard and premium candies is as follows: 

 

Standard

 

Premium

Number of purchase orders

6,000

 

4,000

Number of units

400,000

 

100,000

Number of sales orders

2,000

 

3,000

 

 

 

 

Refer to the Aunt Lucy's Candies information above. If a single sales order for premium candies requires 2 purchase orders for a total of 500 pieces (units), how much overhead should be assigned to that order? A. $201.08B. $204.93C. $262.56D. $240.00

 

44. Compton CorporationThe following overhead cost information is available for Compton Corporation for 2011: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$100,000

Receiving

Number of shipments received

    60,000

Machine setups

Number of setups

  150,000

Quality control

Number of inspections

    50,000

 

 

 

During the year, 5,000 purchase orders were issued; 20,000 shipments were received; 3,000 machine setups were performed; and 4,000 inspections were conducted. Refer to the Compton Corporation information above. What is the overhead rate for the purchasing activity? A. $0.05 per purchase orderB. $20.00 per purchase orderC. $72.00 per purchase orderD. $3.13 per purchase order

 

45. Compton CorporationThe following overhead cost information is available for Compton Corporation for 2011: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$100,000

Receiving

Number of shipments received

    60,000

Machine setups

Number of setups

  150,000

Quality control

Number of inspections

    50,000

 

 

 

During the year, 5,000 purchase orders were issued; 20,000 shipments were received; 3,000 machine setups were performed; and 4,000 inspections were conducted. Refer to the Compton Corporation information above. What is the overhead rate for the receiving activity? A. $1.88 per shipment receivedB. $6.00 per shipment receivedC. $3.00 per shipment receivedD. $0.33 per shipment received

 

46. Compton CorporationThe following overhead cost information is available for Compton Corporation for 2011: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$100,000

Receiving

Number of shipments received

    60,000

Machine setups

Number of setups

  150,000

Quality control

Number of inspections

    50,000

 

 

 

During the year, 5,000 purchase orders were issued; 20,000 shipments were received; 3,000 machine setups were performed; and 4,000 inspections were conducted. Refer to the Compton Corporation information above. If Job #229 required 5 purchase orders, 10 shipments, 8 machine setups, and 4 inspections to fill, how much overhead should be assigned to Job #229? A. $    4.06B. $303.75C. $580.00D. $  85.50

 

47. The following overhead cost information is available for Henderson Inc. for 2008: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$80,000

Receiving

Number of shipments received

  60,000

Machine setups

Number of setups

  45,000

Quality control

Number of inspections

  30,000

 

 

 

During the year, 4,000 purchase orders were issued; 2,400 shipments were received; 4,500 machine setups were performed; and 2,500 inspections were conducted.If Job #101 required 2 purchase orders, 6 shipments, 3 machine setups, and 5 inspections to complete, how much overhead should be assigned to Job #101? A. $280.00B. $60.00C. $150.00D. $40.00

 

48. Wake ConstructionWake Construction manufactures and installs standard and custom-made cabinetry for residential homes. Last year, the company incurred $200,000 in overhead costs. After implementing activity-based costing (ABC), the company's accountant identified the following related information: 

 

 

Proportion

Activity

Allocation Base

of Overhead Cost

Material delivery and handling

Number of deliveries

30%

Inspections

Number of inspections

25%

Supervision

Hours of supervisor time

20%

Purchasing

Number of purchase orders

25%

 

 

 

The number of activities for standard and custom-made cabinets is as follows: 

 

Standard

 

Custom-made

Number of deliveries

200

 

100

Number of inspections

600

 

400

Hours of supervisor time

1,800

 

2,200

Number of purchase orders

1,000

 

1,000

 

 

 

 

During the past year, Wake accepted a customer order for a set of custom-made cabinets that would require the following: 

Direct labor cost (25 hours at $15 per hour)

$   375

Direct materials (wood) (900 ft at $3.00 per foot)

$2,700

Number of deliveries

3

Number of inspections

5

Hours of supervisor time

5

Number of purchase orders

3

 

 

Refer to the Wake Construction information above. How much overhead should be applied to the above customer order? A. $4,050B. $285C. $3,360D. $975

 

49. Wake ConstructionWake Construction manufactures and installs standard and custom-made cabinetry for residential homes. Last year, the company incurred $200,000 in overhead costs. After implementing activity-based costing (ABC), the company's accountant identified the following related information: 

 

 

Proportion

Activity

Allocation Base

of Overhead Cost

Material delivery and handling

Number of deliveries

30%

Inspections

Number of inspections

25%

Supervision

Hours of supervisor time

20%

Purchasing

Number of purchase orders

25%

 

 

 

The number of activities for standard and custom-made cabinets is as follows: 

 

Standard

 

Custom-made

Number of deliveries

200

 

100

Number of inspections

600

 

400

Hours of supervisor time

1,800

 

2,200

Number of purchase orders

1,000

 

1,000

 

 

 

 

During the past year, Wake accepted a customer order for a set of custom-made cabinets that would require the following: 

Direct labor cost (25 hours at $15 per hour)

$   375

Direct materials (wood) (900 ft at $3.00 per foot)

$2,700

Number of deliveries

3

Number of inspections

5

Hours of supervisor time

5

Number of purchase orders

3

 

 

Refer to the Wake Construction information above. What is the total product (manufacturing) cost for the above customer order? A. $4,050B. $285C. $3,360D. $975

 

50. Johnson ManufacturingJohnson Manufacturing anticipates incurring $850,000 in overhead costs this year. After implementing activity-based costing (ABC), the company's controller identified the following related information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

20%

Machine setups

Number of setups

15%

Production

Number of machine hours

65%

 

 

 

The number of activities expected is as follows: 

Total number of purchase orders

4,800

Total number of setups

2,400

Total number of machine hours

12,000

 

 

Refer to the Johnson Manufacturing information above. How much total overhead will be allocated to the production activity? A. $170,000B. $552,500C. $30,000D. $127,500

 

 

 

 

 

41. Aunt Lucy's CandiesAunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $400,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

30%

Processing

Number of units

50%

Sales

Number of sales orders

20%

 

 

 

The number of activities for standard and premium candies is as follows: 

 

Standard

 

Premium

Number of purchase orders

6,000

 

4,000

Number of units

400,000

 

100,000

Number of sales orders

2,000

 

3,000

 

 

 

 

Refer to the Aunt Lucy's Candies information above. What is the overhead rate for the purchasing activity? A. $12.00 per purchase orderB. $18.28 per purchase orderC. $40.63 per purchase orderD. $36.56 per purchase order

 

42. Aunt Lucy's CandiesAunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $400,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

30%

Processing

Number of units

50%

Sales

Number of sales orders

20%

 

 

 

The number of activities for standard and premium candies is as follows: 

 

Standard

 

Premium

Number of purchase orders

6,000

 

4,000

Number of units

400,000

 

100,000

Number of sales orders

2,000

 

3,000

 

 

 

 

Refer to the Aunt Lucy's Candies information above. What is the overhead rate for the sales activity? A. $16.00 per sales orderB. $102.63 per sales orderC. $10.26 per sales orderD. $52.23 per sales order

 

43. Aunt Lucy's CandiesAunt Lucy's Candies sells standard and premium chocolate candies through its catalog business. Many of the candies are sold in bulk to other companies. Last year, the company incurred $400,000 in overhead costs. After implementing activity-based costing (ABC), the company's controller identified the following information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

30%

Processing

Number of units

50%

Sales

Number of sales orders

20%

 

 

 

The number of activities for standard and premium candies is as follows: 

 

Standard

 

Premium

Number of purchase orders

6,000

 

4,000

Number of units

400,000

 

100,000

Number of sales orders

2,000

 

3,000

 

 

 

 

Refer to the Aunt Lucy's Candies information above. If a single sales order for premium candies requires 2 purchase orders for a total of 500 pieces (units), how much overhead should be assigned to that order? A. $201.08B. $204.93C. $262.56D. $240.00

 

44. Compton CorporationThe following overhead cost information is available for Compton Corporation for 2011: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$100,000

Receiving

Number of shipments received

    60,000

Machine setups

Number of setups

  150,000

Quality control

Number of inspections

    50,000

 

 

 

During the year, 5,000 purchase orders were issued; 20,000 shipments were received; 3,000 machine setups were performed; and 4,000 inspections were conducted. Refer to the Compton Corporation information above. What is the overhead rate for the purchasing activity? A. $0.05 per purchase orderB. $20.00 per purchase orderC. $72.00 per purchase orderD. $3.13 per purchase order

 

45. Compton CorporationThe following overhead cost information is available for Compton Corporation for 2011: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$100,000

Receiving

Number of shipments received

    60,000

Machine setups

Number of setups

  150,000

Quality control

Number of inspections

    50,000

 

 

 

During the year, 5,000 purchase orders were issued; 20,000 shipments were received; 3,000 machine setups were performed; and 4,000 inspections were conducted. Refer to the Compton Corporation information above. What is the overhead rate for the receiving activity? A. $1.88 per shipment receivedB. $6.00 per shipment receivedC. $3.00 per shipment receivedD. $0.33 per shipment received

 

46. Compton CorporationThe following overhead cost information is available for Compton Corporation for 2011: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$100,000

Receiving

Number of shipments received

    60,000

Machine setups

Number of setups

  150,000

Quality control

Number of inspections

    50,000

 

 

 

During the year, 5,000 purchase orders were issued; 20,000 shipments were received; 3,000 machine setups were performed; and 4,000 inspections were conducted. Refer to the Compton Corporation information above. If Job #229 required 5 purchase orders, 10 shipments, 8 machine setups, and 4 inspections to fill, how much overhead should be assigned to Job #229? A. $    4.06B. $303.75C. $580.00D. $  85.50

 

47. The following overhead cost information is available for Henderson Inc. for 2008: 

Activity

Allocation Base

Overhead Cost

Purchasing

Number of purchase orders

$80,000

Receiving

Number of shipments received

  60,000

Machine setups

Number of setups

  45,000

Quality control

Number of inspections

  30,000

 

 

 

During the year, 4,000 purchase orders were issued; 2,400 shipments were received; 4,500 machine setups were performed; and 2,500 inspections were conducted.If Job #101 required 2 purchase orders, 6 shipments, 3 machine setups, and 5 inspections to complete, how much overhead should be assigned to Job #101? A. $280.00B. $60.00C. $150.00D. $40.00

 

48. Wake ConstructionWake Construction manufactures and installs standard and custom-made cabinetry for residential homes. Last year, the company incurred $200,000 in overhead costs. After implementing activity-based costing (ABC), the company's accountant identified the following related information: 

 

 

Proportion

Activity

Allocation Base

of Overhead Cost

Material delivery and handling

Number of deliveries

30%

Inspections

Number of inspections

25%

Supervision

Hours of supervisor time

20%

Purchasing

Number of purchase orders

25%

 

 

 

The number of activities for standard and custom-made cabinets is as follows: 

 

Standard

 

Custom-made

Number of deliveries

200

 

100

Number of inspections

600

 

400

Hours of supervisor time

1,800

 

2,200

Number of purchase orders

1,000

 

1,000

 

 

 

 

During the past year, Wake accepted a customer order for a set of custom-made cabinets that would require the following: 

Direct labor cost (25 hours at $15 per hour)

$   375

Direct materials (wood) (900 ft at $3.00 per foot)

$2,700

Number of deliveries

3

Number of inspections

5

Hours of supervisor time

5

Number of purchase orders

3

 

 

Refer to the Wake Construction information above. How much overhead should be applied to the above customer order? A. $4,050B. $285C. $3,360D. $975

 

49. Wake ConstructionWake Construction manufactures and installs standard and custom-made cabinetry for residential homes. Last year, the company incurred $200,000 in overhead costs. After implementing activity-based costing (ABC), the company's accountant identified the following related information: 

 

 

Proportion

Activity

Allocation Base

of Overhead Cost

Material delivery and handling

Number of deliveries

30%

Inspections

Number of inspections

25%

Supervision

Hours of supervisor time

20%

Purchasing

Number of purchase orders

25%

 

 

 

The number of activities for standard and custom-made cabinets is as follows: 

 

Standard

 

Custom-made

Number of deliveries

200

 

100

Number of inspections

600

 

400

Hours of supervisor time

1,800

 

2,200

Number of purchase orders

1,000

 

1,000

 

 

 

 

During the past year, Wake accepted a customer order for a set of custom-made cabinets that would require the following: 

Direct labor cost (25 hours at $15 per hour)

$   375

Direct materials (wood) (900 ft at $3.00 per foot)

$2,700

Number of deliveries

3

Number of inspections

5

Hours of supervisor time

5

Number of purchase orders

3

 

 

Refer to the Wake Construction information above. What is the total product (manufacturing) cost for the above customer order? A. $4,050B. $285C. $3,360D. $975

 

50. Johnson ManufacturingJohnson Manufacturing anticipates incurring $850,000 in overhead costs this year. After implementing activity-based costing (ABC), the company's controller identified the following related information: 

Activity

Allocation Base

Proportion of Overhead Cost

Purchasing

Number of purchase orders

20%

Machine setups

Number of setups

15%

Production

Number of machine hours

65%

 

 

 

The number of activities expected is as follows: 

Total number of purchase orders

4,800

Total number of setups

2,400

Total number of machine hours

12,000

 

 

Refer to the Johnson Manufacturing information above. How much total overhead will be allocated to the production activity? A. $170,000B. $552,500C. $30,000D. $127,500

 

 

 

 

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