Fidelity Stereo Company has provided the following information regarding its activity-based costing system: Purchasing department costs are allocated based on purchase orders, and the predetermined overhead allocation rate is $77 per purchase order.
? Assembly department costs are allocated based on the number of parts used, and the predetermined overhead allocation rate is $5 per part.
? Packaging department costs are allocated based on the number of units produced, and the predetermined overhead allocation rate is $4 per unit produced.
Each stereo produced has 50 parts,and the direct materials cost per unit is $70.There are no direct labor costs.Fidelity Stereo has an order for 1200 stereos,which will require 45 purchase orders in all.What is the total cost for the 1200 stereos?

Question

Fidelity Stereo Company has provided the following information regarding its activity-based costing system: Purchasing department costs are allocated based on purchase orders, and the predetermined overhead allocation rate is $77 per purchase order.
?	Assembly department costs are allocated based on the number of parts used, and the predetermined overhead allocation rate is $5 per part.
?	Packaging department costs are allocated based on the number of units produced, and the predetermined overhead allocation rate is $4 per unit produced.
Each stereo produced has 50 parts,and the direct materials cost per unit is $70.There are no direct labor costs.Fidelity Stereo has an order for 1200 stereos,which will require 45 purchase orders in all.What is the total cost for the 1200 stereos?

Quizplus · Accepted Answer

Computation of total cost of 1200 stereos:
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Fidelity Stereo Company Has Provided the Following Information Regarding Its