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Problem 1: Pawn Corp has identified two activities in its activity based costing system: setups and production. The activity overhead rates for these two activities are $421 per setup and $2.42 per direct labor hour, respectively. To make product X5, Pawn incurred $935 in direct materials costs, $230 in direct labor costs, and used 5 setups and 25 direct labor hours. The total overhead assigned to product X5 would be:
Option 1: $3,330.50
Option 2: Cannot be determined
Option 3: $1,165.00
Option 4: $2,165.50
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