Reference: 05-08
Albin Company Uses Activity-Based Costing to Compute Product

question 20

Multiple Choice

Reference: 05-08
Albin Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline & \text { Estimated Overhead Cost } & \text { Expected Activity } \\\hline \text { Activity } 1 & \$ 42,700 & 2,000 \\\hline \text { Activity 2 } & \$ 24,934 & 2,600 \\\hline \text { Activity 3 } & \$ 49,289 & 2,300 \\\hline\end{array}\\\text { Actual costs and activities for the current year were as follows: }\\\begin{array} { | l | l | l | } \hline & \text { Actual Overhead Cost } & \text { Actual Activity } \\\hline \text { Activity } 1 & \$ 42,855 & 1,995 \\\hline \text { Activity 2 } & \$ 24,794 & 2,595 \\\hline \text { Activity 3 } & \$ 49,294 & 2,295 \\\hline\end{array}\end{array}$$
-The total credits to the Manufacturing Overhead account during the year were closest to:

• A)$116,923.
• B)$116,661.
• C)$120,133.
• D)$116,943.

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Definitions:

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A catalyst that involves the use of a transition metal, which speeds up chemical reactions without being consumed.

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The lightest and most abundant chemical element in the Universe, consisting of just one proton and one electron.

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