Sanford Tools produces a variety of scissors and other cutting ins
A) $24,000
B) $2,400
C) $12,500
D) None of these answers is correct.

Question

Quizplus · Accepted Answer

After filling in the amounts given (*)in the two tables below,work backwards (as described)to obtain the amount of batch-level overhead costs was expected during the period.
Activity rates:
Unit
Batch
Product
Facility
Total cost (a)
$50,000*
$24,000#
$10,000*
$120,000*
Total cost driver volume (b)
4,000 DLHs*
100 setups*
% of use*
24,000 units*
Activity rate (a)÷ (b)
$12.50 per DLH
$2,400^
$10 per %
$5 per unit
^ Computed in table below
# $2,400 x 100 setups = $24,000
Allocation to hand-tillers:
Unit
Batch
Product
Facility
Total
Cost driver volume (a)
400 DLHs*
10 setups*
30%*
1,000*
Rate (b)
$12.50 per DLH^
$10 per %^
$5 per unit^
Allocation (a)x (b)
$5,000
$2,400#
$3,000
$5,000
$15,400*
^ Computed in table above
# $15,400 - $5,000 - $3,000 - $5,000 = $24,000

Sanford Tools Produces a Variety of Scissors and Other Cutting