Use this information to answer the following Questions
Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.

-Assume that Rocket is using a volume-based costing system, and the preceding overhead costs are applied to all products on the basis of direct labor hours. The overhead cost that would be assigned to the Deluxe product line is closest to:
A) $456,471.
B) $646,471.
C) $961,176.
D) $1,141,176.
E) None of the answers is correct.

Question

Use this information to answer the following Questions
Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.

-Assume that Rocket is using a volume-based costing system, and the preceding overhead costs are applied to all products on the basis of direct labor hours. The overhead cost that would be assigned to the Deluxe product line is closest to:
A) $456,471. 
B) $646,471. 
C) $961,176. 
D) $1,141,176. 
E) None of the answers is correct.

Quizplus · Accepted Answer

The overhead cost that would be assigned to the Deluxe product line is closest to $456,471. This is because the overhead costs are applied to all products on the basis of direct labor hours, and the Deluxe product line has the highest number of direct labor hours.

Use This Information to Answer the Following Questions