Draus Products 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. estimated overheadexpected activityactivity#1$60,0484800activity#2$58,6562400activity#3$130,3244400Actual costs and activities for the current year were as follows. actual overhead costactual activityacrivity#1$59,7984830activity#2$58,4762370activity#3$130,2344450The total amount of overhead applied during the year was closest to:1. $248,5082. $248,9883. $250,1554. $251,334

Activity rate = Estimated overhead/Expected activity Overhead applied = Activity rate*Activity…

Answered: Draus Products Company uses…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 12E: Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home...

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Draus Products 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.

	estimated overhead	expected activity
activity#1	$60,048	4800
activity#2	$58,656	2400
activity#3	$130,324	4400

Actual costs and activities for the current year were as follows.

	actual overhead cost	actual activity
acrivity#1	$59,798	4830
activity#2	$58,476	2370
activity#3	$130,234	4450

The total amount of overhead applied during the year was closest to:

1. $248,508

2. $248,988

3. $250,155

4. $251,334

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