Jacob Industries produces two electronic decoders, A and B. Decoder A is more sophisticated and requires more programming and testing than does Decoder B. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity centers and their related information as follows.
|
Activity Centers
|
Cost Pool Total
|
Cost Driver
|
|
Repair & maintenance on assembly machine
|
$102,000.00
|
number of units produced
|
|
Programming Costs
|
175,300.00
|
number of program hours
|
|
Software inspections
|
18,000.00
|
number of inspections
|
|
Product testing
|
25,000.00
|
number of tests
|
|
Total overhead costs
|
$320,300.00
|
|
Expected activity for each product follows:
| |
Number Of Units
|
Number of Programming Hrs.
|
Number of Inspections
|
Number of Tests
|
|
Decoder A
|
25,000
|
2,300
|
210
|
1,385
|
|
Decoder B
|
32,000
|
1,750
|
75
|
1,250
|
|
Totals
|
57,000
|
4,050
|
285
|
2,635
|
What is the allocated overhead costs for the Repair & Maintenance center for Decoder A?