Reference: 05-14
Brooke Corporation Uses Activity-Based Costing to Determine Product

Reference: 05-14
Brooke Corporation uses activity-based costing to determine product costs for external financial reports. Activity rates computed at the beginning of the year are used to apply manufacturing overhead costs to products. The company has provided the following data concerning its activity-based costing system.
The data used to develop activity rates were:
Estima
$$\begin{array} { | l | l | l | l | } \hline \text { Activity Cost Pools } & \begin{array} { l } \text { Estimated } \\\text { Overheod Cost }\end{array} & { \text { Expected Activity } } \\\hline \text { Machane related (machine-hours) } & \$ 777,400 & 26,000 & \text { MHs } \\\hline \text { Batch setup (setups) } & \$ 1,814,400 & 28,000 & \text { setups } \\\hline \begin{array} { l } \text { Gentral factory (direct } \\\text { labour-hours) }\end{array} & \$ 478,800 & 18,000 & \text { DLHs } \\\hline \begin{array} { l } \text { The actual activity for the year } \\\text { was: }\end{array} & & & \\\hline & & \text { Protual Activity for the Year } \\\hline \text { Actrvity Cost Pools } & \text { Total } & 17,000 & 11,000 \\\hline \text { Machane related (machine-hours) } & 28,000 & 7,000 & 21,000 \\\hline \text { Batch setup (setups) } & 28,000 & 9,000 & 9,000 \\\hline \begin{array} { l } \text { Gentral factory (direct } \\\text { labour-hours) }\end{array} & 18,000 & & \\\hline\end{array}$$ The actual total manufacturing overhead cost incurred for the year was $3,064,400.
-The debits to the Manufacturing Overhead control account during the year (prior to closing out the balance) would have totalled:

A) $3,130,400.
B) $3,097,400.
C) $3,064,400.
D) $3,076,500.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free