Reference no: EM131787864

Question - The Good Sounds Corp. is attempting to get a better estimate of the cost of their products.

As a first step, they are attempting to allocate overhead by defining three activity cost pools and three corresponding cost drivers. They believe that the cost drivers of each of these pools correlate with the costs of that activity pool.

The estimated overhead costs and activity levels for each activity are given as follows:

Activity Cost Driver Estimated OH costs Estimated Activity level

Supervision Direct Labor $ $60,000 $150,000

Inspection # Inspections $40,000 2,000

Machine use Machine hours $400,000 10,000

Activity data for the two products manufactured by the company are as follows:

Radios CD Players

Direct labor $ $120,000 $30,000

# Inspections 500 1,500

Machine hours 5,000 5,000

The following are the direct costs associated with each product and the units manufactured:

Radios CD Players

Direct material $1,500,000 $500,000

Direct labor $120,000 30,000

Units produced 20,000 10,000

What amount of overhead will be applied to CD Players? Overhead to be applied?