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Spud, Inc. a manufacturer of gourmet potato chips, employs activity-
based costing. The budgeted data for each of the activity cost pools is
provided below for the year 2017.
Activity Cost Pools
Estimated Overhead
Expected Use of Cost Drivers per Activity
Ordering and receiving
12,000 orders
$84,000
Food processing
60,000 machine hours 480,000
Packaging
440,000 labor hours 1,760,000
For 2017, the company had 11,000 orders and used 50,000 machine
hours, and labor hours totaled 500,000. What is the total overhead
applied?
BE4-12
Spin Cycle Architecture uses three activity pools to apply overhead to
its projects. Each activity has a cost driver used to allocate the
overhead costs to the projects. The activities and related overhead costs
are as follows: initial concept formation $40,000, design $300,000, and
construction oversight $100,000. The cost drivers and expected use are
as follows.
Activities
Cost Drivers
Use of Cost Drivers per Activity
Expected