The Gardenview Corporation Has Identified the Following Overhead Costs and Activity

question 193

Multiple Choice

The Gardenview Corporation has identified the following overhead costs and activity drivers for next year: $$\begin{array}{l}\begin{array} { c c c c } \text { Overhead Item } & \begin{array} { c } \text { Expected } \\\text { Cost }\end{array} & \text { Activity Driver } & \begin{array} { c } \text { Expected } \\\text { Ouantity }\end{array} \\\hline \text { Setup costs } & \$ 200,000 & \text { Number of setups } & 250 \\\text { Ordering costs } & 80,000 & \text { Number of orders } & 1,600 \\\text { Maintenance } & 400,000 & \text { Machine hours } & 2,000 \\\text { Power } & 40,000 & \text { Kilowatt hours } & 40,000\end{array}\\\\\text { The following are two of the jobs completed during the year: }\\\begin{array} { l c c } & \text { Job 6A } & \text { Job 8B } \\\text { Direct materials } & \$ 3,000 & \$ 4,000 \\\text { Direct labor } & \$ 2,800 & \$ 4,800 \\\text { Units completed } & 100 & 160 \\\text { Direct labor hours } & 50 & 80 \\\text { Number of setups } & 1 & 4 \\\text { Number of orders } & 4 & 5 \\\text { Machine hours } & 20 & 25 \\\text { Kilowatt hours } & 30 & 50\end{array}\end{array}$$
The company's normal activity is 2,000 direct labor hours.
If the four activity drivers are used to allocate overhead costs, total overhead allocated to Job 6A would be

• A)$5,533.
• B)$4,830.
• C)$5,030.
• D)$5,630.

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