Figure 4-8
Tandem Company manufactures two products (D and F). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers:

-Refer to Figure 4-8. Using functional-based costing, what is the amount of overhead cost to be assigned to Product D using machine hours as the allocation base?
A) $12,000
B) $60,000
C) $48,000
D) $16,800

Question

Figure 4-8
Tandem Company manufactures two products (D and F). The overhead costs ($84,000) have been divided into three cost pools that use the following activity drivers:
 
-Refer to Figure 4-8. Using functional-based costing, what is the amount of overhead cost to be assigned to Product D using machine hours as the allocation base?
A) $12,000 
B) $60,000 
C) $48,000 
D) $16,800

Quizplus · Accepted Answer

Machine hours for Product D = 1,400 hoursOverhead cost = $60,000Overhead cost per machine hour = $60,000 / 4,000 hours = $15 per hourOverhead cost assigned to Product D = 1,400 hours * $15 per hour = $21,000

Figure 4-8 Tandem Company Manufactures Two Products (D and F). the Overhead