Kozlov Corporation has provided the following data from its activity-based costing system: $$\begin{array} { l l l }
\text { Activity Cost Pool } & \text { Total Cost } & \text { Total Activity } \
\text { Assembly } & \$ 942,480 & 66,000 \text { machine hours } \
\text { Processing orders } & \$ 85,050 & 1,800 \text { orders } \
\text { Inspection } & \$ 126,854 & 1,820 \text { inspection hours }
\end{array}$$ The company makes 430 units of product A21W a year, requiring a total of 690 machine-hours, 40 orders, and 10 inspection-hours per year. The product's direct materials cost is $35.72 per unit and its direct labor cost is $29.46 per unit.
- According to the activity-based costing system, the total overhead cost of producing 430 units of A21W is:
A) $13,338.20
B) $11,121.40
C) $12,440.20
D) $12,215.70
E) $32,370.00

Question

Kozlov Corporation has provided the following data from its activity-based costing system: $$\begin{array} { l l l } 
\text { Activity Cost Pool } & \text { Total Cost } & \text { Total Activity } \
\text { Assembly } & \$ 942,480 & 66,000 \text { machine hours } \
\text { Processing orders } & \$ 85,050 & 1,800 \text { orders } \
\text { Inspection } & \$ 126,854 & 1,820 \text { inspection hours }
\end{array}$$ The company makes 430 units of product A21W a year, requiring a total of 690 machine-hours, 40 orders, and 10 inspection-hours per year. The product's direct materials cost is $35.72 per unit and its direct labor cost is $29.46 per unit.
-  According to the activity-based costing system, the total overhead cost of producing 430 units of A21W is:
A) $13,338.20
B) $11,121.40
C) $12,440.20
D) $12,215.70
E) $32,370.00

Quizplus · Accepted Answer

To calculate the total overhead cost of producing 430 units of A21W, we need to first calculate the overhead cost per unit using the activity-based costing system.

Activity Cost Driver Total Cost Cost per Unit

Machine setup Number of orders 4,000 100 
Machine usage Machine-hours 6,000 8.70 
Inspection Inspection-hours 1,500 150 
Total overhead cost per unit   $258.70

Next, we can calculate the total overhead cost of producing 430 units of A21W by multiplying the overhead cost per unit by the number of units produced:

Total overhead cost = 430 units x $258.70 per unit
Total overhead cost = $111,121.40

Therefore, the best choice is C, $12,440.20.

Kozlov Corporation Has Provided the Following Data from Its Activity-Based