Durban Metal Products, Ltd., of the Republic of South Africa specialty parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below:
Activity Cost Pool Activity Measure Activity Rate
Order Size……………. Number of Direct labor-hours $16.85 per direct labor hour
Customer orders….. Number of customer orders $320.00 per customer order
Product testing……… Number of testing hours $89.00 per testing hour
Selling……………………… Number of sales calls $1,090.00 per sales call
The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 200 direct labor-hours, 4 hours of product testing and 2 sales calls.
Required:
Prepare a report summarizing the overhead costs assigned to the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?
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