Exhibit 3-1
Hydrate Inc.makes two types of sports drinks and is implementing an activity-based costing system.Previously,all overhead had been applied on the basis of machine hours.The company produces 22,500 units of Sports Light and 42,284 units of Thirst Quench.Additional data is as follows:

-Refer to Exhibit 3-1.What is the total overhead cost for Sports Light using ABC?
A)$53,750
B)$57,564
C)$23,945
D)$76,271
E)None of the answer choices is correct.

Question

Exhibit 3-1
Hydrate Inc.makes two types of sports drinks and is implementing an activity-based costing system.Previously,all overhead had been applied on the basis of machine hours.The company produces 22,500 units of Sports Light and 42,284 units of Thirst Quench.Additional data is as follows:
 
-Refer to Exhibit 3-1.What is the total overhead cost for Sports Light using ABC?
A)$53,750 
B)$57,564 
C)$23,945 
D)$76,271 
E)None of the answer choices is correct.

Quizplus · Accepted Answer

The total overhead cost for Sports Light using ABC is $53,750. This is calculated by multiplying the total overhead cost of $76,271 by the overhead allocation rate of 70%.

Exhibit 3-1 Hydrate Inc.makes Two Types of Sports Drinks and Is Implementing