Glassey Corporation Uses Activity-Based Costing to Assign Overhead Costs to Products.Overhead

question 58

Multiple Choice

Glassey Corporation uses activity-based costing to assign overhead costs to products.Overhead costs have already been allocated to the company's three activity cost pools as follows: Processing, $20, 000;Supervising, $33, 500;and Other, $16, 500.Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches.The costs in the Other activity cost pool are not assigned to products.Activity data appear below: What is the overhead cost assigned to Product T3 under activity-based costing?

• A)$26, 100
• B)$19, 400
• C)$35, 000
• D)$6, 700

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Definitions:

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to estimate the cost of manufacturing overhead for a specific activity base.

Machine-Hours

An indicator of the time spent in production, calculating the duration in hours that machinery is active during the manufacturing cycle.

Direct Labor-Hours

The accumulated hours spent by workers directly involved in manufacturing activities.

Forming

A manufacturing process used to shape metal or other materials using a combination of pressure and tooling.