Durban Metal Products is a South African company that makes metal parts for construction equipment and vehicles. It uses activity-based costing with four cost pools: direct labor, product testing, sales calls, and other overhead. The company needs to calculate the total overhead cost assigned to a recent order for trailer axles that required 200 direct labor hours, 12 hours of product testing, and 6 sales calls.
Durban Metal Products, Limited, of the Republic of South Africa makes.pdf
1. Durban Metal Products, Limited, of the Republic of South Africa makes specialty metal 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: 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, 12 hours of product testing, and 6
sales calls. Required: What is the total overhead cost assigned to the order for heavy-duty trailer
axles?
