Reference no: EM132662738

Chirping Company manufactures only one type pf product: XH31. The company uses Activity Costing system to allocate overhead costs.

The following information are available:

Overhead Costs:

Administrative Wages and Salaries $130,000
Production Department Expenses $110,000
Marketing Department Expenses $120,000

Distribution of cost consumption :
Administrative wages and salaries:
Filling Orders 60%
Machine Setup 30%
Customer Support 10%
Others 0%
Total 100%

Production Department:
Filling Orders 40%
Machine setup 50%
Customer Support 0%
Others 10%
Total 100%

Marketing department:
Filling Orders 45%
Machine setup 0%
Customer Support 50%
Others 5%
Total 100%

Activity cost pools at Chirping Company are as follows:
Filling Orders -> Number of orders from customers
Machine Setup-> Number of machine hours
Customer Support -> Number of Active customers

In the current year, Chirping Company received 800 orders of XH31 in total, from 88 of the company's regular customer. The machinery with which the product is manufactured had to be setup in total for 33 times, and the machine hours were 17,000, in total.
In the month of January, the company received 70 orders from 8 different regular customers, the machinery was actively running for 1488 hours, in order to manufacture the XH31 to be able to fulfill the order received.

Required:

Problem a. Prepare the first-stage allocation of overhead costs to the activity cost pools.

Problem b. Compute the Activity rates for all the activity pools.

Problem c. Compute the total overhead cost for the product : XH31, only for the month of January.