Activity Rates from Hilliard Corporation's Activity-Based Costing System Are Listed

question 26

Multiple Choice

Activity rates from Hilliard Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products: $\begin{array}{llr}\text {Activity Cost Pools}&\text {Activity Rate}\\\text { Processing customer orders } & \$ 92.86 \text { per customer order } \\\text { Assembling products } & \$ 1.78 \text { per assembly hour } \\\text { Setting up batches } & \$ 52.09 \text { per batch }\end{array}$

Last year, Product XL91 involved 2 customer orders, 434 assembly hours, and 20 batches. How much overhead cost would be assigned to Product XL91 using the activity-based costing system?

• A) $1,041.80
• B) $772.52
• C) $2,000.04
• D) $66,908.88
• E) $146.73

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Definitions:

Tertiary Amides

Amides derived from carboxylic acids where the nitrogen atom is bonded to three other carbon atoms, not including the carbonyl carbon.

Secondary Amides

Organic compounds characterized by a carbonyl group (C=O) attached to a nitrogen atom, which in turn is bonded to two alkyl or aryl groups.

Acid Chlorides

Reactive derivatives of carboxylic acids where the hydroxyl group is replaced with a chlorine atom, used in organic synthesis.

Nitriles

Organic compounds containing the cyano group (-C≡N), which consists of a carbon atom triple-bonded to a nitrogen atom.