The Skagit Company manufactures Hooks and Nooks. The following shows the activities per product and total activity information: Setups Inspections Assembly (dlh) Hooks - 4,000 units 1 3 1 Nooks - 8,000 units 2 2 3 Activity Pool Activity Base Budgeted Activity Cost Setups 20,000 $ 60,000 Inspections 24,000 120,000 Assembly (dlh) 28,000 420,000 Calculate the total factory overhead to be charged to each unit of Hooks.

Total factory overhead to be charged to each unit of Hooks is $33

Explanation:

Sum of all Activity Cost = Total Factory Overhead

Calculate the total factory overhead to be charged to each unit of Hooks

Activity rate = Budgeted amount / Total of each activity base

∴ Activity Rate

For Setups = 60,000 / 20,000 = 3 per setup

For Inspections = 120,000 / 24,000 = 5 per inspections

For Assembly = 420,000 / 28,000 = 15 per dlh

Activity Cost = Activity base for each unit * Activity rate

∴ Activity Cost

For Setups = 1 x 3 = $3

For Inspections = 3 x 5 = $15

For Assembly = 1 x 15 = $15

Recall that;

Sum of all Activity Cost is the Total Factory Overhead

= $3 + $15 + $15

= $33