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Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year:
Cost Pools | Budgeted Cost | Cost Driver | Cost Driver Level |
Setup | $ | 160,000 | | Number of setups | 800 | |
Ordering | | 80,000 | | Number of orders | 4,000 | |
Maintenance | | 200,000 | | Machine hours | 20,000 | |
Power | | 40,000 | | Kilowatt hours | 40,000 |
Total direct labor hours budgeted = 8,000 hours.
The following data applies to Product X, one of the products completed during the year.
| |
Direct materials | $ | 4,000 |
Direct labor | $ | 4,800 |
Units completed | | 400 |
Direct labor hours | | 160 |
Number of setups | | 16 |
Number of orders | | 32 |
Machine hours | | 200 |
Kilowatt hours | | 400 |
If the activity-based cost drivers are used to allocate overhead cost, the total overhead cost of Product X will be:
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