Question at position 16 [table]
Velvo Industries stands as a leading manufacturer in the industrial sector, consistently delivering top-notch products. The company's activity-based costing system comprises six distinct activity cost pools and their respective activity rates (refer to the first table below). Activity data is available for two of the company's products: Product Bond007 and Product Tyson007, as detailed in the second table. What would be the total overhead cost allocated to Bond007 using the activity-based costing system? | | | | | | Activity Cost Pool | Activity Rates Supporting direct labor | $6 | per direct labor-hour Machine processing | $4 | per machine-hour Machine setups | $50 | per setup Production orders | $90 | per order Shipments | $14 | per shipment Product sustaining | $840 | per product | | | | | Total Expected Activity | Bond007 | Tyson007 Direct labor-hours | 100 | 200 Machine-hours | 50 | 500 Machine setups | 4 | 4 Production orders | 10 | 5 Shipments | 5 | 6 Product sustaining | 1 | 1
[/table]Answer[table]
Velvo Industries stands as a leading manufacturer in the industrial sector, consistently delivering top-notch products. The company's activity-based costing system comprises six distinct activity cost pools and their respective activity rates (refer to the first table below). Activity data is available for two of the company's products: Product Bond007 and Product Tyson007, as detailed in the second table. What would be the total overhead cost allocated to Bond007 using the activity-based costing system? | | | | | | Activity Cost Pool | Activity Rates Supporting direct labor | $6 | per direct labor-hour Machine processing | $4 | per machine-hour Machine setups | $50 | per setup Production orders | $90 | per order Shipments | $14 | per shipment Product sustaining | $840 | per product | | | | | Total Expected Activity | Bond007 | Tyson007 Direct labor-hours | 100 | 200 Machine-hours | 50 | 500 Machine setups | 4 | 4 Production orders | 10 | 5 Shipments | 5 | 6 Product sustaining | 1 | 1
[/table][input]

Question

Question at position 16 [table]
Velvo Industries stands as a leading manufacturer in the industrial sector, consistently delivering top-notch products. The company's activity-based costing system comprises six distinct activity cost pools and their respective activity rates (refer to the first table below). Activity data is available for two of the company's products: Product Bond007 and Product Tyson007, as detailed in the second table. What would be the total overhead cost allocated to Bond007 using the activity-based costing system? |  |  |  |  |  |  Activity Cost Pool | Activity Rates Supporting direct labor | $6 | per direct labor-hour Machine processing | $4 | per machine-hour Machine setups | $50 | per setup Production orders | $90 | per order Shipments | $14 | per shipment Product sustaining | $840 | per product |  |  |  |  | Total Expected Activity | Bond007 | Tyson007 Direct labor-hours | 100 | 200 Machine-hours | 50 | 500 Machine setups | 4 | 4 Production orders | 10 | 5 Shipments | 5 | 6 Product sustaining | 1 | 1
[/table]Answer[table]
Velvo Industries stands as a leading manufacturer in the industrial sector, consistently delivering top-notch products. The company's activity-based costing system comprises six distinct activity cost pools and their respective activity rates (refer to the first table below). Activity data is available for two of the company's products: Product Bond007 and Product Tyson007, as detailed in the second table. What would be the total overhead cost allocated to Bond007 using the activity-based costing system? |  |  |  |  |  |  Activity Cost Pool | Activity Rates Supporting direct labor | $6 | per direct labor-hour Machine processing | $4 | per machine-hour Machine setups | $50 | per setup Production orders | $90 | per order Shipments | $14 | per shipment Product sustaining | $840 | per product |  |  |  |  | Total Expected Activity | Bond007 | Tyson007 Direct labor-hours | 100 | 200 Machine-hours | 50 | 500 Machine setups | 4 | 4 Production orders | 10 | 5 Shipments | 5 | 6 Product sustaining | 1 | 1
[/table][input]

BlackTom AI · Accepted Answer

Question restatement: The prompt asks for the total overhead cost allocated to Bond007 using the activity-based costing (ABC) system, given six activity cost pools with their rates and the activity quantities for Bond007 and Tyson007.

Options analysis:
- Option set contains empty choice (""), so there is no listed alternative to evaluate against. Since there is no explicit alternative provided to compare, we proceed by performing the ABC calculation for Bond007 and noting the result for accuracy.

Step-by-step ABC calculation for Bond007:
1) Direct labor hours: Bond007 uses 100 direct labor-hours at a rate of $6 per direct labor-hour. Contribution to overhead = 100 × 6 = 600.
2) Machine processing: Bond007 has 50 machine-hours at $4 per machine-hour. Contribution = 50 × 4 = 200.
3) Machine setups: Bond007 has 4 setups at $50 per setup. Contribution = 4 × 50 = 200.
4) Production orders: Bond007 has 10 production orders at $90 per order. Contribution = 10 × 90 = 900.
5) Shipments: Bond007 has 5 shipments at $14 per shipment. Contribution = 5 × 14 = 70.
6) Product sustaining: Bond007 has 1 product at $840 per product. Contribution = 1 × 840 = 840.

Total overhead for Bond007 = 600 + 200 + 200 + 900 + 70 + 840 = 2810.

Error checking and common misconceptions:
- It is easy to mis-sum, for example thinking only labor and machine hours matter or misapplying the per-item rates (e.g., forgetting the per-order or per-setup pools). Each pool must be multiplied by the corresponding activity quantity specific to Bond007.
- The dataset’s provided answer (2480) does not reflect the correct aggregation above. The discrepancy could come from omitting one pool (e.g., either the product sustaining pool or one of the activity pools) or a miscalculation in one of the component multiplications. Always recalculate each component to verify.

Why the calculated total is correct conceptually:
- ABC assigns overhead based on multiple activities that drive costs, not just direct labor or machine hours. By multiplying each activity’s rate by Bond007’s activity level and summing, we capture the full overhead allocation across all six pools as specified.

Summary note on missing options: Since the answer choices field in the provided data is empty, there isn’t an explicit alternative to rate against. The computed total overhead for Bond007 using the given ABC data is 2810, which you should compare to any official solution choices if they become available.

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