Posted: July 26th, 2016

Determine the total overhead cost that would be assigned to each of the products.

Larner Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the following six activity cost pools and activity rates:

Activity Cost Pool Activity Rates
Supporting direct labor $9 per direct labor-hour
Machine processing $3 per machine-hour
Machine setups $35 per setup
Production orders $150 per order
Shipments $120 per shipment
Product sustaining $875 per product

Activity data have been supplied for the following two products:

Total Expected Activity
J78 W52

Direct labor-hours 1,100 50
Machine-hours 2,600 40
Machine setups 9 1
Production orders 9 1
Shipments 18 1
Product sustaining 1 1

Required:
Determine the total overhead cost that would be assigned to each of the products.