### Educational Exercise on Activity-Based Costing**Company Overview:**YKPBNO412 Corp. manufactures and sells two products: Product TOTEMO and Product SUGOI. The company employs an activity-based costing system to allocate overhead costs. Below is the detailed information on their costing pools, activity measures, and expected activity.#### Activity-Based Costing Data:| Activity Cost Pools | Estimated Overhead Cost | Activity Measures | Expected Activity ||----------------------|-------------------------|-------------------|-------------------|| **Labor-related** | $132,400 | Direct Labor Hours (DLHs) | Product TOTEMO: 1,800 Product SUGOI: 900 **Total: 2,700** || **Production orders**| $62,430 | Number of Orders | Product TOTEMO: 1,000 Product SUGOI: 600 **Total: 1,600** || **Order size** | $976,450 | Machine Hours (MHs) | Product TOTEMO: 3,700 Product SUGOI: 3,400 **Total: 7,100** || **Total Estimated Cost** | **$1,171,280** | | |**Exam Question:**As part of the Baruch College Exam, it is required to calculate the total overhead applied to Product SUGOI under this activity-based costing system. Please select the closest answer after performing the calculations, rounding intermediate steps to two decimal places.**Multiple Choice Answers:**- $535,150- $914,020- $467,602- $1,038,880The problem requires understanding of how to allocate overhead costs based on the given activity measures.

Answered: YKPBNO412 Corp., manufactures and sells…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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### Educational Exercise on Activity-Based Costing

**Company Overview:**
YKPBNO412 Corp. manufactures and sells two products: Product TOTEMO and Product SUGOI. The company employs an activity-based costing system to allocate overhead costs. Below is the detailed information on their costing pools, activity measures, and expected activity.

#### Activity-Based Costing Data:

| Activity Cost Pools | Estimated Overhead Cost | Activity Measures | Expected Activity |
|----------------------|-------------------------|-------------------|-------------------|
| **Labor-related** | $132,400 | Direct Labor Hours (DLHs) | Product TOTEMO: 1,800 <br> Product SUGOI: 900 <br> **Total: 2,700** |
| **Production orders**| $62,430 | Number of Orders | Product TOTEMO: 1,000 <br> Product SUGOI: 600 <br> **Total: 1,600** |
| **Order size** | $976,450 | Machine Hours (MHs) | Product TOTEMO: 3,700 <br> Product SUGOI: 3,400 <br> **Total: 7,100** |
| **Total Estimated Cost** | **$1,171,280** | | |

**Exam Question:**
As part of the Baruch College Exam, it is required to calculate the total overhead applied to Product SUGOI under this activity-based costing system. Please select the closest answer after performing the calculations, rounding intermediate steps to two decimal places.

**Multiple Choice Answers:**
- $535,150
- $914,020
- $467,602
- $1,038,880

The problem requires understanding of how to allocate overhead costs based on the given activity measures.

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Step 1

ACTIVITY BASED COSTING

A powerful tool for measuring performance, Activities based Costing is used to identify, describe, assign cost to & Report on Agency Operation.

ABC system calculate the Cost of Individual activities and Assign cost to Cost Object such as Product & Services on the Basis of Activities undertaken to Produce each Product or services.

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