Reference no: EM132658804
Question - Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.
Activity Cost Cost Driver
Material handling $225,000
Number of parts Material insertion 2,475,000
Number of parts Automated machinery 840,000
Machine hours Finishing 170,000
Direct labor hours
Packaging 170,000
Orders shipped Total $3,880,000
The following information pertains to the three product lines for next year:
Economy Standard DeluxeUnits to be produced 10,000 5,000 2,000 Orders to be shipped 1,000 500 200 Number of parts per unit 10 15 25 Machine hours per unit 1 3 5 Labor hours per unit 2 2 2
Assume that Rocket is using a volume-based costing system, and the preceding overhead costs are applied to all products on the basis of direct labor hours. Calculate the overhead cost that would be assigned to the Standard product line?
a. $456,471.
b. $646,471.
c. $961,176.
d. $1,141,176.
e. None of the answers is correct.