Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for Internal decislon-making purposes. The company has four activity cost pools as listed below. Activity Cost Pool Order size Customer ordera Product testing Selling Activity Measure Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls Activity Rate 17.50 per direct labor-hour $355.00 per customer order 82.00 per testing hour $1,480.00 per sales call The managing director of the company would like Information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 150 direct labor-hours, 17 hours of product testing, and 6 sales calls. Required: What is the tetal oyerhead cost assigned to the order for heavy-duty trailer axles?

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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The managing director of the company would like Information concerning the cost of a recently completed order for heavy-duty traller
exles. The order required 150 direct labor-hours, 17 hours of product testing, and 6 sales calls.
Required:
What is the total overhead cost assigned to the order for heavy-duty trailer axles?
Activity Cost Pool
ABC Cost
Order size
Customer orders
Product testing
Selling
Total overhead cost
Transcribed Image Text:The managing director of the company would like Information concerning the cost of a recently completed order for heavy-duty traller exles. The order required 150 direct labor-hours, 17 hours of product testing, and 6 sales calls. Required: What is the total overhead cost assigned to the order for heavy-duty trailer axles? Activity Cost Pool ABC Cost Order size Customer orders Product testing Selling Total overhead cost
Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting
edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal
decision-making purposes. The company has four activity cost pools as listed below:
Activity cost Pool
Order size
Customer ordera
Product testing
Selling
Activity Measure
Number of direct labor-hours
Number of customer orders
Number of testing hours
Number of salea calla
Activity Rate
17.50 per direct labor-hour
355.00 per customer order
82.00 per testing hour
$1,480.00 per sales call
The managing director of the company would like Information concerning the cost of a recently completed order for heavy-duty trailer
axles. The order required 150 direct labor-hours, 17 hours of product testing, and 6 sales calls.
Required:
What is the total overhead cost assigned to the order for heavy-duty traller axles?
Transcribed Image Text:Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below: Activity cost Pool Order size Customer ordera Product testing Selling Activity Measure Number of direct labor-hours Number of customer orders Number of testing hours Number of salea calla Activity Rate 17.50 per direct labor-hour 355.00 per customer order 82.00 per testing hour $1,480.00 per sales call The managing director of the company would like Information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 150 direct labor-hours, 17 hours of product testing, and 6 sales calls. Required: What is the total overhead cost assigned to the order for heavy-duty traller axles?
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